HP Keeps Lead in Global PC Sales

By Andy Patrizio

July 17, 2008

Channel powerhouse Hewlett-Packard kept its lead in global PC sales during the second quarter, but challenger Dell closed the gap thanks in part to its recent investment in channel sales.

Research firm Gartner reported that worldwide PC shipments for the second quarter of 2008 were 71.9 million units, a 16 percent increase from the second quarter of 2007.

The growth rate was slower in the U.S. market as PC shipments hit 16.5 million units in the quarter, a 4.2 percent increase over the same quarter last year. To reach that level, OEMs had to cut prices aggressively, and with most component prices holding steady, those cuts came out of their bottom lines.

"Eventually, that will kill them going forward,"  said Mika Kitagawa, principal analyst for Gardner's Client Computing Markets group. "They decided to go into really aggressive price cuts, but I was a little surprised that their price cuts were that high."

Kitagawa said the price cuts were across the board, in both business and consumer PCs, but consumer products had a much deeper average selling price (ASP) decline. "The larger vendors can survive such a cut, but it was worse for white-box vendors and smaller PC vendors. Some of them might not survive," she said.

HP remained the number one PC vendor, with 18.1 percent of the 2Q08 market and 17.1 percent year-over-year growth. Dell was firmly in the number two spot and gained on HP, with 15.6 percent of the market and 21.9 percent growth. Gartner attributed the remarkable growth to Dell going into the retail market and finding new sales channels.

The best showing belonged to Apple, with 38.1 percent growth in the quarter despite its MacBook product line, its best seller, getting a little long in the tooth. Apple still has not released Penryn-based notebooks even though Intel released the processor in January. There is an iMac desktop with a Penryn 3.06Ghz processor on the market.

While Windows Vista's problems have been cited as the reason for Apple's resurgence, Kitagawa said it's not the only reason. "There are a few reasons Apple is doing well. One is the popularity of the iPod and iPhone, and they have been very successful at building the cool brand image. If you want to be cool, Apple is the product to have," she said.

Japan was the only other region to fall below 10 percent growth, with an 8.2 percent increase, thanks to strong notebook sales in the enterprise and the growth of mini-notebooks. Kitagawa said Japan is considered a mature market, like the U.S., and growth is slower.

PC shipments in Europe, the Middle East and Africa, often called EMEA, reached 23.1 million units for a 23.5 percent increase over 2Q07. Notebook demand was particularly strong, with growth of 40 percent. Asia/Pacific, which includes the red hot Chinese and Indian markets, was up 18.1 percent to 20.1 million units, with 45.6 percent mobile PC growth.

Finally, Latin America grew 23.2 percent to seven million units. Here sales were more mixed, with a combination of AMD and Intel processors and brand name as well as white box PCs. Notebook PCs were up 55 percent in the quarter while desktop PCs grew an estimated 10 percent.

Kitagawa estimates that worldwide sales will grow approximately 12.3 percent in Q3, but that might change to the upside as ASPs have still not stabilized.

(This article was adapted from Internetnews.com)