HP positive in negative PC market

HP positive in negative PC market

While the PC market languishes in the aftermath of Y2K implementation -- shrinking 13.6 per cent year on year according to the latest IDC figures -- Hewlett-Packard's sales have sky-rocketed, with overall Q1 growth of more than 60 per cent.

HP has muscled in on the beleaguered white box market, where sales dropped by 22 per cent mainly due to CPU shortages.

"HP is satisfying a demand in the white box space that cannot be fulfilled because of components shortages," said IDC PC market analyst Logan Ringland.

Three of the top five companies -- Compaq, IBM and Dell -- experienced negative growth in the first quarter.

In contrast, HP's commercial PC sales grew 27.7 per cent year on year, while the market shrunk 23.7 per cent for the same period.

"HP managed to get down into the small business space where the white box vendors play," Ringland said. "It is a lot easier for a vendor to take market share off the white box sector than another vendor so it is a very smart move to get down to that level."

Only 442,116 PC units were shipped in the first quarter -- a decrease of 16.6 per cent on the previous quarter and down 8.4 per cent for the same time last year.

However HP's performance in the mass merchant market was also strong, where sales grew 117 per cent, compared to an overall market growth of just 12.5 per cent. Portable sales grew 110.8 per cent against an industry rise of 25.2 per cent.

"HP has grown strongly in its consumer base," Ringland said. "The company hadn't been a strong player in the market until about the second quarter of 1999 and now its consumer sales make up a reasonable chunk of its overall performance."

HP is the third-largest vendor in the overall Australian PC market with 10.6 per cent of the market share, beating out Dell, which went down 17.9 per cent in terms of units shipped.

While IDC predicts PC sales will improve marginally, Ringland said the market would probably not see significant growth until later in the year.

"Q2 will be stronger than the first, but vendors are finding it very hard to push products out as the GST looms. There is a real lock down in the business space and I don't think we will see Q2 being the largest quarter of the year, as it traditionally is.

"The third quarter will be quite interesting as companies start looking at spending more on hardware after GST implementation," he added.

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