HP Topples Dell From No. 1 Perch In U.S. - InformationWeek

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Infrastructure // PC & Servers

HP Topples Dell From No. 1 Perch In U.S.

Shipments of desktops and laptops in the quarter fell 7.1% from the first quarter last year to 63.5 million units, IDC found.

Hewlett-Packard dethroned Dell in the first quarter as the leader of the U.S. PC market, two analyst firms said Wednesday.

HP's success is an indication that Dell is still struggling to revitalize its business through a major overhaul that started with the return of founder Michael Dell in early 2007. Dell returned after the company lost the crown as the world's largest computer maker in terms of shipments to HP.

In the first quarter, Dell lost its standing in the United States to a tougher HP, according to the latest PC market numbers from IDC and Gartner.

"HP's dethroning of Dell as the U.S. market share leader and extending its worldwide market share lead is a testament to the company's solid record of business execution over the last several quarters and indicates Dell still faces some challenges in its efforts to reignite its business," IDC analyst Bob O'Donnell said in a statement.

Indeed, Dell stumbled amidst tough competition in the retail space, Gartner said. Coupled with a weak U.S. business market as a result of the economic recession, those two factors landed Dell in the No. 2 slot.

Overall, the worldwide PC market declined less than IDC expected. Shipments of desktops and laptops in the quarter fell 7.1% from the first quarter last year to 63.5 million units, slightly better than the firm's projected decline of 8.2%. Gartner pegged the drop at 6.5% to 67.2 million units.

Both firms said low-priced laptops, particularly so-called netbooks, were driving growth. Netbooks are mini-laptops with screen sizes of 10 inches or less. With prices as low as $300, netbooks have become a favorite in the global economic recession.

Despite the overall decline in PC shipments, the analyst firms saw some improvements in the market. Both researchers said inventory levels had fallen, but differed on the impact. While IDC expected more stable production over the next couple of quarters, with growth returning toward the end of the year, Gartner was less optimistic.

"We are seeing some evidence of channel inventory restocking, particularly in the U.S.," Gartner research director George Shiffler said. "This restocking should not be interpreted as a recovery in PC end-user demand; it’s still unclear if the global PC market has hit the bottom."

IDC's and Gartner's findings were roughly in line with what Intel saw in reporting financial earnings for the first quarter. The chipmaker said Tuesday that PC sales appeared to have "bottomed out," but the market remained too uncertain for the company to offer a revenue projection for the second quarter.

In terms of the top five vendors, Gartner and IDC had the same rankings based on the number of PC shipments. Globally, the top five were HP, Dell, Acer, Lenovo, and Toshiba. In the United States, the rankings were HP, Dell, Acer, Apple, and Toshiba.

A difference in the global rankings was how close Acer had come to Dell. While IDC had Acer trailing by a couple of percentage points, Gartner had the vendors in a virtual tie. Dell's lead amounted to only one-tenth of a percent.

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