Compaq's PC market share slides

Compaq's PC market share slides

The number of PCs shipped worldwide in the third quarter increased as much as 15 per cent over the same period last year.

But the news wasn't all good for market leader Compaq, according to two reports released last week.

Compaq's worldwide unit sales grew just 9.7 per cent over the same period last year, compared to a 24 per cent increase for IBM in second place, and a 61 per cent increase for third-placed Dell, according to preliminary figures collected by Dataquest.

In the US, Compaq saw its sales decline 8 per cent in the third quarter, pulling its share of the domestic market down almost 4 per cent, from 19.6 per cent a year ago to 15.8 per cent in the third quarter, International Data Corp (IDC) concluded from its preliminary findings. However, strong demand for consumer products helped propel the company's growth sequentially by 30 per cent, IDC said.

Distracting merger

The results don't indicate poor execution by Compaq or a decline in the popularity of its products, one analyst said. The PC maker has been distracted by its merger with Digital Equipment Corp, and continues to suffer from a surplus of inventory in its distribution channels, said Christine Arrington, senior analyst with IDC.

Dataquest's and IDC's reports look at sales of desktop and notebook PCs, and don't include PCs marketed as servers.

PC vendor rankings in the US remain unchanged, with Compaq in front, trailed by Dell, IBM, Hewlett-Packard and Gateway. Worldwide rankings were also unchanged, with Compaq trailed by IBM, Dell, HP and Gateway, Dataquest said.

Direct vendors Dell and Gateway experienced the strongest growth in the quarter both worldwide and in the US, with Dell reporting its 12th consecutive quarter of more than 50 per cent growth.

Total worldwide PC unit shipments climbed to more than 22.6 million in the quarter, with strong sales in the US and Western Europe helping to offset continued weakness in Southeast Asian markets, Dataquest said.

Overall though, the growth in PC sales is slowing as corporate markets reach levels of near saturation and most early adopters in the consumer market have bought their PCs, IDC's Arrington said. "It's harder to convince the late adopters to buy PCs, and that's why we're seeing so much emphasis on low pricing from the vendors," she said.

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