Study: Dell, Gateway Report Strong PC Sales

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The U.S. personal computer market posted robust growth in the third quarter, with Dell Computer Corp., Gateway Inc. and other PC manufacturers tallying huge shipment gains on a year-over-year basis, according to a new report by International Data Group's International Data Corp. unit.


On a year-over-year basis, Dell's shipments rose 65 percent in the third quarter, to 1.34 million units, while Gateway moved 781,000 PCs in the quarter, 44 percent more than it did a year ago. IDC, a provider of data, analysis and advisory services to information technology suppliers and information services professionals, defines vendor shipments as branded shipments that exclude OEM sales but include shipments to distribution channels or direct-to-end users.


"Dell [has] made a huge push with their Internet direct model and also in providing service," said Christine Arrington, senior analyst at IDC. "Two or three years ago, what you were hearing about Dell was that they couldn't make it in the corporate environment because they couldn't provide service, and they've worked very hard on remedying that. The combination of the service and the model has helped them prove that wrong."


The third quarter typically is Gateway's strongest, Arrington said, though she added that the North Sioux City, SD, company is benefiting from customers who have become more accustomed to the direct model it uses.


"As consumers get more educated in using the PC and more familiar with it, I think they're going to be more comfortable in purchasing either through the mail, over the telephone or online. I think it has a lot to do with the education of the consumer," she said.


Compaq Computer Corp. shipped 1.5 million units, remaining the leading U.S. vendor with 15.8 percent domestic market share. Those figures include shipments by Digital Equipment Corp., which Compaq bought earlier this year. However, the Houston-based firm saw an 8 percent decline in shipments from the comparable period a year ago, when it had 19.6 percent market share. Compaq was the only top-five vendor to lose ground.


Rounding out the top five were Dell with 14.1 percent market share, IBM Corp. with 9.1 percent, Hewlett-Packard Co. with 8.4 percent and Gateway with 8.2 percent. IBM and Hewlett-Packard posted impressive growth as well, with shipments climbing 34 percent and 27 percent, respectively. Total PC shipments in the United States gained 14 percent.


IBM's return to the top five came about largely because of the company's focus on cutting prices, Arrington said. Since last year, IBM, Armonk, NY, began offering its first PC in the sub-$1,000 category.


The firm U.S. market, combined with strength in Western Europe, managed to offset tepid demand from Asia and the Pacific. Worldwide, PC shipments jumped 15 percent from the third quarter of 1997, roughly in line with the U.S. growth rate. Sequentially, worldwide sales rose 13 percent.


IDC pointed to Western Europe's healthy low-cost PC market and its strong economy to account for most international growth, but this was largely offset by dragging sales in Russia and Southeast Asia. Notably, Japan's PC market showed a sign of reviving consumer demand with good acceptance of Microsoft Corp.'s Windows 98 and Apple Computer Inc.'s iMac.


IDC compiles its research through end-user surveys, in-depth competitive analysis, broad technology coverage and strategic analysis.
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