Growth in PC sales during the first quarter was pretty good. IDC says that the global market grew 10.9%, better than the last several quarters. But, sales in the US grew just over 3%.
The news was especially good for Hewlett-Packard (HPQ) which had a 28% increase in shipments and moved its market share worldwide up to 19.1%. Dell’s (DELL) shipments fell 6.9% compared to the first quarter of last year. And, its share dropped to 15.2% worldwide.
Tied for third place were Lenovo and Acer with 6.9% shares. But, Acer’s shipments grew over 41% and Lenovo’s were up only 17%. In fifth place was Toshiba with a 4.3% share on 13% growth.
The good news for HP is that sales to consumers were up more than sales to corporations. Dell, on the other hand, makes most of its sales to enterprise customers.
With Dell positioned in the slower growing portion of the market and actually experiencing "negative growth", Wall St. has to wonder if the company can improve its situation at all in the next few quarters. If rivals like Lenovo and Acer continue to gain strength, investors have to ask whether Dell can improve its unit sales at any point in the foreseeable future.
If Dell’s shipments continue to fall as its competitors pick up share, it is possible that the company could end up with only 10% of the global market two or three years out.
In the event that Dell gets that much smaller, it could make money. But, it would have to downsize to beat the band.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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