Dell, Sun Still On Top Of Workstation Market
Aug 17, 2000 (Tech Web - CMP via COMTEX) -- Dell Computer Corp. remained on top
of the workstation market during the second quarter, but memory and chip set
concerns dragged rivals like Hewlett-Packard Co. down.
According to a report released from International Data Corp., Framingham, Mass.,
Dell (stock: DELL) retained the top spot in both total workstations shipped, as
well as the dominant supplier of Windows NT machines. Sun Microsystems Inc.
(stock: SUNW) ranked second in overall shipments, while maintaining its
dominance of the traditional Unix workstation market. HP (stock: HWP) and IBM
Corp. (stock: IBM) ranked third and fourth in total workstation shipments.
Dell ranked first in the NT workstation market, followed by Compaq Computer
Corp. (stock: CPQ), Hewlett-Packard, and IBM. Dell shipped 93,000 NT
workstations, an increase of 8 percent from the first quarter. Compaq's
workstation sales dipped 12 percent, to 53,150 units. IBM sales grew 29 percent,
to 37,500 units. Overall, sales of NT workstations slipped 7 percent, to 269,861
units, IDC said.
"IBM had a backlog from the last quarter," said IDC analyst Kara Yokley. "The
good news is that backlog is slowly declining, which is a good thing. As for
Dell, it's going out there pretty strong and doing a good job attacking the
vertical markets."
Yokley said memory constraints affected vendors like HP, which suffered a 32
percent drop in sequential shipments after halting shipments of the Kayak
workstation. HP's Kayak had selected the Intel 820 chip set with a Memory
Translator Hub to interface to SDRAM, a part Intel recalled in May.
"It's hard to say how many workstations HP would have sold without the [chip
set] problems, but I will say Kayak sales were down about 35 percent, mostly due
to the chip set issue," Yokley said.
HP's Unix machines also dropped slightly by 5 percent, as HP's 18,525 shipments
placed the Palo Alto, Calif. company at third in the market. The result
disappointed analyst Kurt King of Banc of America Securities LLC, San Francisco,
who downgraded the stock from "strong buy" to "buy" Thursday morning.
HP beat estimates in reporting earnings of 99 cents, or $1.1 billion, in net
income for the quarter ended July 31, compared to earnings of $853 million, or
71 cents, for the same period last year, including one-time gains and charges.
Net revenue was $11.8 billion, compared with $10.3 billion in last year's third
quarter.
"Unix growth, the swing factor in our view, was disappointing, and management's
100 percent bullishness will be viewed as less credible after last quarter's
results," King wrote in a research note. "We still like the story, but don't see
upside for the stock in the near term."
In Unix workstations, Sun's estimated 60 percent share was enough to keep it
atop the market, as shipments grew 7 percent, to 84,050 units. Sales of
second-ranked IBM workstations outpaced Sun at 11 percent, but IBM shipped only
20,000 Unix boxes. SGI followed HP as the fourth-ranked Unix vendor, and saw its
sales slip 15 percent, to 7,612 units.
"The message here is that Unix is not dead by any means," Yokley said.
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