Enter multiple symbols separated by commas

Hewlett-Packard Extends Lead Over Dell in PC Market, Studies Say

Hewlett-Packardextended its lead over Dell in the worldwide personal-computer market in the fourth quarter, according to reports released Wednesday by two top technology research firms.

The analyses from IDC and Gartner produced slightly different numbers but the same general results: With overall PC sales unspectacular, HP managed to outgrow the rest of the market and lead the worldwide tally of PC sales for the second quarter in a row.

PC sales increased roughly 7.4% in the fourth quarter, according to Gartner, while IDC pegged the rise at 8.7%. Both firms noted declines in the U.S. market, the second consecutive period with a domestic slump.

One culprit appeared to be heavy competition from flat-panel TVs and other consumer electronics over the holiday season.

Holding Off on Buying

Also, many people may have been holding off on PC purchases because of the Jan. 30 consumer release of the new Windows Vista operating system from Microsoft. But analysts at both firms said the Vista effect was hard to measure -- many consumers just as likely took advantage of low PC prices that manufacturers offered to clear their inventories before Vista arrives.

For all of 2006, PC sales rose around 9% to roughly 230 million. The leading vendor for the year was Dell, but just barely. Dell and HP each registered 16 or 17% market share in the IDC and Gartner tallies. Lenovo Group Ltd. was third with 7%, while Acer Inc. had 6% and Toshiba 4%.

HP ate away at Dell's dominance by outselling its rival in the third quarter and keeping it up in the fourth. HP's sales jumped 24 percent in the fourth quarter -- its best such period since 2000 -- while Dell's sales dropped about 9 percent. The shift left HP with 17% to 18% of the worldwide market in the fourth quarter, to Dell's 14% to 15%.

Opposite Directions

The trend tracks the opposite directions that Dell's and HP's stock prices have been heading the past two years. HP has retooled itself as a leaner giant under CEO Mark Hurd, while Dell has struggled with strategic questions, an accounting investigation and huge laptop battery recall.

Dell remains the leading vendor in the U.S., with about 31% market share in all of 2006, according to IDC. HP was second at 22%, followed by Gateway at 6.7% percent, Apple at 4.7% percent and Toshiba at 4.3%.

Even with the Vista launch, Gartner expects PC sales to only slightly increase their pace in 2007, with 9.9% growth in units sold. IDC expects to see a slightly better rise.

But Gartner vice president Charles Smulders cautioned that overall revenue should be just about flat because of brutal price competition.

"It's a very challenging market to operate in, with very slim margins, one which requires the highest levels of execution in order to maintain profitability," he said.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Why women cheat?

    Is cheating bad? Why do women cheat? The founder and CEO of affair website Ashley Madison tells all, including why he has his eye on China.

  • Judge's gavel

    The Financial Industry Regulatory Authority disciplined several financial services firms and individuals in May 2015.

  • Fine wines & finance

    Why you should try something a little different on date night. Bring the romance and champagne, and a calculator too. Every once in a while have a date to talk money and finance, and keep an important part of your relationship on track. Reporter Sharon Epperson talks to a couple who does just that.

U.S. Video

  • Cramer: Here's a sign the market could rally

    Wall Street's been soaking in red, but "Mad Money" host Jim Cramer has one signal to watch for that could point to another run.

  • Burger war maneuvers

    Cramer looks at the number of company's selling burgers and tries to determine the quality names, as well as those to avoid.

  • Cramer: What's driving defense?

    Cramer says that even though President Obama has made it clear the US can no longer be the world's policeman, the country can become the world's arms dealer. Profiting from defense spending.