figures compiled by IDC show that Compaq Computer Corporation maintains
a slim lead over Dell Computer Corporation in worldwide (WW) PC shipments,
while Dell extends its lead in the US PC market. Jumping into third place
in both US and WW market shares is Hewlett-Packard, whose year-over-year
growth rates led all of the major PC manufacturers by a significant margin.
Although Gateway's sales and market share increased in the US space, they
were leapfrogged by HP. IBM, which exited the retail market late last
year, has dropped from third place to fifth.
growth rate of the worldwide market as a whole was double the US growth
rate, indicating continuing softness in the US.
Compaq has recently been trumpeting that their PC group has returned to
profitability. Clearly, this is a good thing for them. What is not so
good is that its lead in the worldwide market is slipping - if the 1999-2000
trend continues at the same rate, Dell will surpass them in mid-2001.
We expect that Compaq will recover slightly, but they must grow faster
than the general market (especially in the US) if they want to maintain
their lead beyond the end of 2001. Dell owns the US market, and has been
growing approximately 20 percentage points faster than the market for
the last two years.
a lot of attention will focus on Dell and Compaq, the big winner here
is HP. Their worldwide growth rate was more than double the market's rate,
and their US growth was more than five times the market's. A significant
portion of this comes from their leadership position in the retail market
(ref. TEC Note "HP
"Medals" In U.S. PC Olympics"). If HP continues on this trend (we
do not expect them to do so), they too will pass Compaq's US position
in late 2001.
other trend - no surprise here - is that PC market consolidation continues
for the now-top three vendors. This consolidation is strong in the US,
less well defined in the worldwide market. (Our comparison is for 1998-2000
for Dell, Compaq, and HP only; adding IBM - last year's #3 WW - to the
mix actually shows consolidation reversing.)
the longer term, Compaq will need to take serious measures to maintain
their lead. A lot of this will depend on their direct sales model finally
operating on an approximate par with Dell. HP should continue their current
practices, and they'll be breathing down Compaq's neck pretty soon.
All of the top vendors (the "top three" plus Gateway) produce well-featured
machines, but Dell and Hewlett-Packard generally get higher reliability
marks, along with Gateway. Compaq still lags in some surveys, especially
in the home market.
users should not make purchasing decisions based solely on who's leading
the pack at the moment, corporate viability should be factored into any
purchase decision. Although Compaq is in no danger of going under, their
recent market weakness should cause potential customers to ask some tough
questions, and perhaps try to improve the terms of any deal.