In a flat PC market, the direct sales model has seemingly made a comeback according to latest figures from analysts which show Dell moving up the vendor ranks.
Figures from both Gartner and IDC indicate Dell made up significant ground during Q1 this year - growing its market share by more than 30 per cent to take the number two PC vendor position behind Compaq.
The results are a blow for the channel, according to Gartner reasearch analyst Andy Woo, who believes Dell will be able to capitalise on its supply chain efficiencies and continue to steal market sare. However, he emphasises that for the majority of PC vendors, direct sales still represent only a fraction of their total turnover.
"At the end of the day, most of the volume still goes through indirect channels," Woo said. "The split is roughly 15 per cent direct versus 85 per cent indirect. The indirect channel will always have a market"According to latest figures from IDC, Dell moved from fourth position in Q4 last year to hold the number two place in Q1 with 10.7 per cent market share. Apart from notebook vendor Toshiba, Dell was the only company to record a substantial increase in sales. Gartner's figures for the same period peg Dell's share at 10.1 per cent.
Dell's success comes during an extremely soft market. IDC figures indicate 478,000 units shipped during Q1 this year - growing on the same time last year but still 15.1 per cent down on Q4 2000 figures. According to Gartner, the Australian PC market grew just 0.7 per cent sequentially but down 3.8 per cent on the same period last year.
Gartner figures show Apple, IBM and Compaq lost the most ground in the first quarter, recording negative market share growth of 37 per cent, 15.8 per cent and 13.1 per cent respectively. Dell was able to leapfrog both IBM and HP.