12:45 PM

PC Sales Climb, HP Gains On Dell

Worldwide shipments are hot--except in Europe, where, according to IDC, potential PC buyers were distracted by the soccer World Cup and increased shipments failed to meet expectations.

The horserace between Dell Inc. and Hewlett-Packard Co. for the lead PC shipment position continues with H-P closing in on Dell, according to reports from IDC and Gartner Inc.

Worldwide shipments continued to grow for the entire PC market, the market research firms said Wednesday.

In one surprise, the European market slowed, but IDC found an unexpected reason for the drop: too many potential PC buyers were distracted by the soccer World Cup with the result that shipments increased by a puny 7 percent year-on-year as against a forecast of 12 percent.

Both market research firms are predicting a more aggressive PC selling environment in future months.

"We continue to see aggressive competition as the market transitions to a new phase," said IDC's Loren Loverde in a statement. "We can expect to see heightened competition in the second half of the year as companies vie for growth. Aggressive competition between processor vendors and the delayed release of Windows Vista will contribute to the changes vendors face entering the next cycle in the PC market." Loverde is director of IDC's Worldwide Quarterly PC Tracker.

Gartner's Charles Smulders looks for larger vendors to gain market share at the expense of smaller firms and system builders. In a statement, Smulders, who is vice president of Gartner's Client Computing Group, said: "Intel's accelerated ramp on its new CPU lines will expose those vendors who have not invested enough in tools and processes to manage their supply chain."

Even with HP's new surge in PC sales -- due primarily to strong consumer shipments -- Dell maintained a healthy lead in shipments. Gartner pegged Dell's second quarter market share at 17.7 percent and HP's at 14.8 percent while IDC put Dell's share at 19.2 percent. and HP's at 15.9 percent. (The market research firms use different parameters to calculate market share results.)

The U.S. market remained strong with manufacturers using low prices and portable sales to propel growth. IDC noted that HP, Apple and Gateway paced the U.S. market with double digit growth rates that outsold the industry average. Gartner said the U.S. PC market grew 6.4 percent represented by 16.6 million units shipped in the second quarter.

Apple Computer appeared to have executed a smooth transition to its Intel-based systems and the company's retail stores made a strong positive impact on its sales. Of Apple's shipments, IDC stated: "Strong portable PC sales through its retail outlets had a significant impact with retail growing by 50 percent and portables by over 60 percent year-on-year."

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