Lee here's the story...sorry if its a repeat...Tim.....Dell Jumps To No. 1 In The United States
By Therese Poletti
SAN FRANCISCO (Reuters) - Dell Computer Corp (Nasdaq:DELL - news). jumped to No. 1 among sellers of
personal computers in the United States in the third quarter, surpassing struggling Compaq Computer Corp
(NYSE:CPQ - news). for the first time, according to two leading market research firms.
The game of leapfrog took place as worldwide shipments of PCs jumped 23.2 percent in the quarter to 28.5 million
units, according to Dataquest, and 25 percent to 27.9 million units, according to International Data Corp.
Dataquest's figures do not include PC servers.
Both Dataquest, a unit of Gartner Group Inc (NYSE:IT - news). and International Data reported in their preliminary
third quarter PC data that Round Rock, Texas-based Dell moved into the No. 1 position in the U.S. market, while
Houston-based Compaq slipped to No. 2.
``I wouldn't say it was a surprise,' said John Brown, a PC analyst at Framingham, Mass.-based IDC. ``It's been more
of 'It's coming, it's coming, when is it going to happen'. Last quarter we had them at a virtual tie.'
According to San Jose, Calif.-based Dataquest, Dell's share of the U.S. market jumped to 17.1 percent, up from
16.4 percent in the second quarter, while Compaq's share slipped to 15.3 percent, down from 16.8 percent last
quarter.
But Compaq remained No. 1 on a worldwide basis, with a 13.8 percent share of the global PC market, compared
with No. 2 Dell's 11.6 percent share, according to IDC. Compaq shipped 3.8 million total units in the quarter, while
Dell shipped a total of 3.2 million units, IDC said.
``As we get into the fourth quarter, it will be more difficult for Dell because Compaq has more consumer sales,'
said Charles Smulders, a PC analyst at Dataquest. ``That works in Compaq's favor in the fourth quarter.' The fourth
quarter is typically the biggest consumer-buying quarter.
Dell, which sells directly to consumers and businesses over the Internet or on the phone, does not sell through
retail outlets.
During the third quarter, demand continued to be fueled by falling prices and improving demand in the Asia Pacific
region and Japan. But in the United States, Dataquest said growth of 22.7 percent was slightly below expectations,
while worldwide demand was right on target.
``Coming off a first half that was abnormally strong, we were expecting it to continue on the third quarter,'
Smulders said. ``There was a slight return to normalcy in Q3. Demand in the consumer market is still strong, but a
lot of the hype in the 'free PC' market is starting to wear off.'
International Business Machines Corp (NYSE:IBM - news). of Armonk, N.Y. weighed in again at No. 3 on a
worldwide basis, according to IDC. IBM had an 8.1 percent share of the world PC market, shipping a total of 2.3
million units, IDC said.
But IBM fell to No. 5 in the U.S. market, where it continues to struggle in the consumer sector. Just last week,
IBM said it would exit the consumer retail market in the United States in early 2000 and plans to sell its Aptiva
consumer family over the Internet.
Hewlett-Packard Co (NYSE:HWP - news). remained No. 4 worldwide, with a 6.7 percent share, shipping 1.9
million units, according to IDC. H-P also was No. 4 in the U.S. market, IDC said.
Both Dataquest and IDC agreed in their rankings for the top four vendors worldwide. However, for the No. 5
position, IDC said that Japan's NEC Corp (Nasdaq:NIPNY - news). and its Packard Bell/NEC remained No. 5 on a
worldwide basis, with a 4.9 percent share, shipping 1.4 million units. But NEC was the only vendor in the top five to
lose market share, IDC said.
Dataquest ranked Gateway Inc (NYSE:GTW - news). as the No. 5 PC vendor worldwide, with a 4.3 percent stake,
shipping 1.2 million units. Dataquest figures exclude PC servers, which are used to manage and control networks.
Apple Computer Inc (Nasdaq:AAPL - news). is expected to move up in the U.S. market to No. 6, from seven in the
second quarter, IDC said, due to the strong sales of its new products, like the iMac, but the final data has not been
compiled for all of the top ten.
Looking to the fourth quarter, both firms agree that the final period should be strong, with the expected uptick from
the holiday shopping season.
``We don't see the IBM Y2K issue in the rest of the year,' Brown said, referring to IBM's announcement last week
that its fourth and first quarter earnings would be hurt by slower spending as customers stop buying new systems
and fix older equipment ahead of the Year 2000.
``It caught us by surprise as it did the market because we haven't gotten any signs from any other vendors that it was
a major issue,' Brown said. ``It's not something we feel is industrywide.'
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