HP knocks Compaq from perch

HP knocks Compaq from perch

Compaq has been knocked off the top of the PC perch by big mover Hewlett-Packard.

While HP attributes much of the success to its reseller relationships, the results also raise questions about Compaq's channel program and its focus on the desktop following its massive mega-merger with Digital.

Monthly sales figures for February from IDC show HP topped the market in the PC space.

Perth-based reseller Zeus Technology sells both HP and Compaq portable computers. Its general manager, Kurt Baeten, said sales for HP and Compaq were "on a par" at Zeus, but said that HP's channel support was superior to Compaq's.

"Compaq is inflexible to the channel," he said. "Compaq seems to be wandering off to retail areas. Hewlett-Packard is far more responsive to the channel.

"If Hewlett-Packard continues what it's doing now and if Compaq continues what it's doing now, I think it can only improve their (HP's) results," Baeten predicted.

Baeten wouldn't comment on whether the pending Compaq/Digital takeover had distracted the giant from the task at hand.

Hewlett Packard's sales and marketing manager, commercial channel organisation, Chris Greig said: "This is not a blip for the shortest month of the year. It is something that has been building up gradually and which we will be building upon."

He opined that the recipe of HP's success had been simple, stating that local assembly created increased confidence in the channel that deliveries would be on time.

"I think a good flow of product from the assembly line has helped, while tremendous endorsement from our reseller partners shows they have really latched onto HP as a serious player in the PC business. We also won some very large end user deals that have begun to rollout sizeable numbers for us," said Greig.

Harvey Norman's group computer controller, Tony Gattari, said HP had done a great job and that it had now become the retailer's largest single supplier of PCs.

"I think Compaq will now have to take them seriously as a competitor, where previously they only really had to look over their shoulders for IBM. The emergence of a 'Big Three' is good for the channel," said Gattari.

Compaq spokesperson Anne Eckert said the results should not be considered alone. When asked if this was a sign Compaq was on the way down, she replied: "To the contrary."

She cited Compaq's first quarter results as evidence of the company's success. Quarter on quarter growth for Compaq in unit shipments increased 60 per cent and revenue was up by 40 per cent, Eckert said.

"Some companies are trying to stir up a bit of mud in the market but this shows we've had our eye on the ball," she said. She also dismissed the suggestion that the impending takeover had distracted the company from the PC marketplace.

Meanwhile, other IDC figures released last week showed Hewlett-Packard increased shipments by 49 per cent in the Asia-Pacific region to move up to third place in the market, behind Compaq and IBM. The research showed first-quarter PC sales in Asia-Pacific were down 29 per cent compared to last year, as a result of a four per cent drop in the number of units sold. IBM and Compaq saw declines in shipments of 1 per cent, and declines of 2 per cent from the first quarter of 1997.

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