PC Makers Bounce Back from Y2K Hangover

Strategic Insights -

Strong consumer demand in the US and abroad helped personal-computer makers lift sales in the first quarter, offsetting the impact of the Y2K hangover on corporate sales. Despite this, the top spots in the PC industry remained largely unchanged, with Dell maintaining its position as the number one vendor in the US and Compaq holding the top spot worldwide. Dell's growth was particularly impressive, with a 36 percent increase in US shipments and a 35 percent growth worldwide, according to research firms International Data Corp. and Gartner Group.

Key Takeaways:

  • Dell's US computer shipments in the first quarter increased 36 percent from the same period a year ago, giving it a 17.1 percent share compared to Compaq's 16.3 percent share, according to IDC.
  • Compaq's growth was only half as fast as Dell's, with a 15 percent increase in US shipments, according to Gartner.
  • The average growth for all vendors was 17 percent in the US and 20 percent worldwide, according to IDC.
  • Global demand was fueled by a major surge in Japan and other Asian markets, which grew at about 35 percent, according to IDC.
  • Compaq remains the world leader with 13.1 percent market share, according to IDC.
  • Dell is No. 2 with 10.5 percent of the market, according to IDC, while Gartner showed Compaq at 12.5 percent share vs. Dell's 10 percent.
  • Hewlett-Packard was the big winner, with a 56 percent increase in shipments worldwide, boosting its market share to 8.1 percent from 6.2 percent, according to IDC.
  • eMachines provided low-cost PCs heavily subsidized by long-term contracts for Internet service, taking the No. 3 spot in US sales, according to IDC.
  • IBM's global share dropped to 6.1 percent from 8.6 percent as shipments fell 14 percent, according to IDC, making it the only one of the top five vendors globally to post a decline.
  • Hewlett-Packard took the No. 3 position from Gateway in the US, according to IDC.

Statistics:

  • 36% - Increase in Dell's US computer shipments in the first quarter.
  • 17.1% - Dell's share of the US market.
  • 15% - Compaq's growth rate in the US.
  • 35% - Average growth rate for all vendors worldwide.
  • 13.1% - Compaq's share of the global market.
  • 10.5% - Dell's share of the global market.
  • 56% - Increase in Hewlett-Packard's shipments worldwide.
  • 8.1% - Hewlett-Packard's share of the global market.
  • 6.2% - Hewlett-Packard's previous share of the global market.
  • 6.1% - IBM's share of the global market.
  • 8.6% - IBM's previous share of the global market.
  • 14% - Decrease in IBM's shipments.

Sources:

  • International Data Corp.
  • Gartner Group.
  • John Pletz, "Y2K hangover hurts PC makers", The Statesman, April 1999.
  • John Pletz, "PC makers begin reporting earnings this week", The Statesman, May 1999.