Monday April 26 12:02 AM ET
PC Growth Strong In Q1, Compaq Still On Top
By Therese Poletti
SAN FRANCISCO (Reuters) - Worldwide shipments of personal computers rose a better-than-expected 17 to 19 percent in the first quarter, fueled by a recovery in Asia and unexpected strength in the consumer market, according to two leading research firms.
According to International Data Corp., worldwide unit shipments rose 19 percent in the first quarter, with the United States leading the way with a stunning 24 percent unit growth.
Gartner Group's Dataquest Inc., which does not include PC servers in its data, said unit shipments grew 17 percent worldwide in the first quarter.
''It's better than you usually expect for the first quarter,'' said Christine Arrington, an analyst at IDC, a market research firm based in Framingham, Mass. ''Coming off the fourth quarter (which is typically strongest), you expect the consumer market to die down a little bit''
Continued health in Europe was also a factor and Asia-Pacific, especially Japan's consumer market, showed strong growth despite prolonged economic weakness in the region.
Both market research firms said that Compaq Computer Corp. (NYSE:CPQ - news), despite its recent earnings woes, maintained its position as the world's No. 1 personal computer maker, but that Dell Computer Corp. (Nasdaq:DELL - news) closed in on Compaq, gaining more market share.
''Compaq did have a very rough quarter, their market share fell nearly a point,'' said David Stremba, principal analyst at Dataquest. ''It was a shining quarter for Dell and Gateway.''
According to Dataquest, Compaq had 13.4 percent share of the world PC market in the first quarter, with 3.35 million units shipped, down from a 14.3 percent share in the year-ago quarter. Unit growth was up 9.9 percent versus a year ago.
By contrast, Dell Computer, now ranked the second-largest PC maker in the world, had a 9.2 percent stake of the world PC market in the first quarter, with 2.3 million units shipped, versus a 7.2 percent stake a year ago. Dell's unit shipments soared 49.1 percent in the quarter, Dataquest said.
International Business Machines Corp. (NYSE:IBM - news), now ranked No. 3, had an 8.4 percent stake of the world PC market in the first quarter, with 2.1 million units shipped, against a 7.5 percent share a year ago, according to Dataquest. IBM's unit shipments jumped 30.8 percent, versus an anemic first quarter last year.
Hewlett-Packard Co. (NYSE:HWP - news) was No. 4 with 6 percent of the world PC market, and 1.5 million units shipped, a slight decline from its share of 6.2 percent a year ago. Hewlett-Packard's unit shipments were up 13.1 percent in the quarter.
''Given all the uncertainty that had been talked about in the PC business, they are obviously very solid numbers,'' said Larry Sennett, a spokesman for Hewlett-Packard, adding that the company was one of two vendors to show sequential growth from the fourth quarter.
''There seems to be a pretty strong appetite for hardware that is thus far undiminished from Y2K issues, home saturation issues, all the criticisms that have been raised about a future major slowdown in the market,'' Sennett added.
Gateway Inc. made its second appearance in Dataquest's top five list, with a 4.3 percent share of the world PC market, and one million units shipped in the quarter, up from a 3.7 percent share and a 38 percent growth in unit shipments.
IDC's numbers, which include PC servers, showed Compaq as the leader with 14.5 percent of the total PC market, with 3.5 million units shipped, down slightly from 14.9 percent of the world market a year ago. Compaq units were up 16 percent.
Dell, according to IDC, had 10 percent of the world PC market, with 2.4 million units shipped, up from a 7.8 percent share of the market a year ago. Dell's unit growth climbed 52 percent versus the year-ago period, IDC said.
IBM had an 8.9 percent share of the world market, with 2.2 million units shipped, up from an 8.1 percent share a year ago. IBM's units jumped 30 percent in the quarter, IDC said.
Hewlett-Packard, with a 6.5 percent share of the world market, shipped 1.6 million units in the quarter. Hewlett-Packard's market share dipped from 6.6 percent a year ago, but units were up 16 percent.
IDC ranked NEC Packard Bell as the fifth-largest personal computer maker in the world, with 6.4 percent of the world PC market in the first quarter and shipping 1.6 million units.
NEC Packard Bell continued to lose market share, falling from 7.2 percent of the world market a year ago. Units were up 6 percent.
''The early rumblings we heard from Compaq indicate that they misread the slow start (in the quarter) and believed it was an industry issue,'' Dataquest's Stremba said.
''It continued to be slow for Compaq where other vendors moved aggressively on pricing actions and stimulated the market more, particularly following (Intel Corp. (Nasdaq:INTC - news)'s) PIII launch.''
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