Dell takes top spot in PC market

Dell's conquest of the top spot fulfills a quest by founder Michael Dell

In this story: Dell lunges for worldwide market share PC market shrinks for first time RELATED STORIES, SITES

By Staff and wire reports

NEW YORK -- Dell Computer has swept past Compaq to become the world's number-one PC maker in the first quarter.

Gartner Dataquest and International Data Corp (IDC) are releasing preliminary data showing Dell's first-quarter PC shipments grew 34.3 percent to 4.16 million, or 12.8 percent of the global market.

Compaq slipped to number-two as growth stalled completely at 3.9 million units shipped during the first quarter, or 12.1 percent of the market.

Dell lunges for worldwide market share

"In the first quarter, Dell made a lunge for the worldwide market share position," says IDC computer hardware analyst Roger Kay.

"For a long time Dell has had the momentum versus Compaq," says Kay. "It was going to happen at some point that Dell would overtake Compaq but it happened far sooner because Dell has gotten more aggressive on PC pricing," he added.

Dell's conquest of the top position fulfills a quest by founder Michael Dell, who started the Texas-based direct seller of computers in his college dormitory in 1984 and built it into a $31 billion company by last year.

Houston-based Compaq has led the industry in shipments since the early 1990s, when it overtook PC pioneer IBM, now the number-four PC vendor. Hewlett-Packard ranks third worldwide.

PC market shrinks for first time

But while Dell has continued to outpace rivals with better than 30 percent year-on-year growth, the current market leader still set plans to lay off 1,700 workers in order to shore up profit margins and boost productivity.

News of Dell's triumph is being released in the same report that says the U.S. PC market has experienced negative growth for the first time in history.

Gartner Dataquest says its study shows a 3.5 percent unit decline to 10.9 million units in the United States and a sluggish 3.5 percent unit growth in the global market to 32.5 million units. The figures are well below the solid double-digit growth rates the PC industry had racked up for two decades before a sales slowdown settled in last fall.

Weaker-than-expected growth in both the U.S. and Western Europe were the principal reasons for the low worldwide PC market growth, says Gartner. Together, the two regions account for almost 60 percent of worldwide shipments.

"Asia Pacific also evidenced widespread symptoms of a marked slowdown as U.S. imports from the region eased significantly," says Gartner Dataquest analyst Todd Kort.

Among the top PC makers, only Dell and IBM show positive growth in market share. NEC, the top PC maker in Japan, and Fujitsu Siemens, the number-two PC vendor in Europe, also showed mid-to-high single digit growth.

Reuters contributed to this report.

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