October 18, 2006 5:13 PM PDT

HP regains spot as No. 1 PC maker worldwide

Hewlett-Packard leapfrogged over Dell to recapture the lead as the No. 1 PC maker worldwide for the first time in almost three years, according to Gartner.

The analyst firm said Wednesday that HP edged out Dell by a mere 110,000 units shipped in the third quarter. Rival PC market trackers at IDC found HP had a larger volume of PCs by 28,000, which that firm called "a statistical tie."

"In the scale of a market of 59 million units, it's a relatively smaller bounce," agreed Charles Smulders, research vice president at Gartner. "But I think more telling is the market share trajectories of Dell and HP, with Dell declining and HP continuing to gain share."

Dell had its lowest year-over-year growth ever, with its global PC shipments growing 3.6 percent, said Gartner. Its worldwide market share decreased to 16.1 percent, from 16.5 percent in the same quarter last year. Smulders attributed the Round Rock, Texas-based company's slowing growth to its reliance on the U.S. corporate market, which is showing weak growth.

"We're in the trough of a replacement cycle. Large accounts are buying fewer machines," he said. IDC said the delay of Microsoft's Vista operating system is a factor as well, with some consumers and businesses waiting to replace desktops and notebooks until the final version is released.

Meanwhile, HP performed well in all regions, with its global PC shipments increasing 15.4 percent since the third quarter of last year, according to Gartner. The Palo Alto, Calif.-based company's worldwide market share went from 15.1 percent last year to 16.3 percent this quarter.

Gartner pegged worldwide PC volume growth at 6.7 percent this quarter, while IDC's tallies showed a 7.9 percent increase. Though the numbers differ slightly, both give the sense of a global slowing of PC shipments.

Both firms also found that the U.S. market experienced negative growth this quarter, with IDC reporting a 0.7 percent year-over-year decline, and Gartner a 2 percent decline.

"We had forecast just over 5 percent growth in the U.S., but actual final growth was negative. A big part of that was Dell, which is a third of the market," said Loren Loverde, IDC's director of PC research. But Dell is not the only one at fault. Gateway, the No. 3 U.S. PC maker, showed almost no significant growth this quarter at 0.3 percent.

Dell has seen a significant slowdown in its shipment growth over the past year, Loverde said, and for a number of reasons.

"They've looked at non-PC technologies. They've had some pressure from Wall Street to focus on profitability, some criticism of their pricing. They're in the middle of refocusing their efforts on a balance of profitability and volume, and maximizing customer satisfaction," he said. "That's all well and fine, but they're not growing as fast as they used to or, in this case, as fast as the market."

The bright spot in the gloomy U.S. market was Apple Computer's better-than-expected quarter. Gartner tallied the Cupertino, Calif. company's growth at 31 percent since the third quarter of 2005, its U.S. market share jumping to 6.1 percent.

Both PC analyst firms attributed Apple's success to the completed transition to Intel processors.

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Quit Advertising HP!
For the past month cnet has talked about HP's blunders and such, and now they're talking about HP's rebound, it's quite annoying to have the constant advertising from cnet.
Posted by ron williams (34 comments )
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It's called News not Advertising...
And I don't see the HP stories about the boardroom as flattering or advertising.
If you don't like HP then just say it but don't try to peg every story about HP as advertising.
Also if you don't like CNet then don't read it.

I like it because it gives a means of feedback just as you excersized with your criticism.
It even lets people disagree with other posters like my disagreeing with your ignorant statement.
Posted by fred dunn (793 comments )
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Glad to see HP, not Dell on top
For a change.
I beleive competition is good for consumers because it offers us
more CHOICE.

Now if only we could do something about Windoze.
Posted by technewsjunkie (1265 comments )
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After past years advances and excellent customer service...HP deserves the sales lead.

Dell deserves the Dilema!
Posted by CustomComputers (51 comments )
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HP Comeback
I would think that the Dell slippage has also to do with some of their PC's (battery recall and mobo/capacitor problems).

BTW..this same story is on usatoday.com, not just cnet.
Posted by jerrellt (17 comments )
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Posted by CustomComputers (51 comments )
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