Dell May Be Catching H-P, Apple Stays Hot (DELL, HPQ, AAPL)

It appears that PC sales held up better than many have feared, and recent tech earnings this week aren’t signaling the end of the run. Data released last night from Gartner and from IDC are showing similar trends, although the numbers appear slightly different if you go through to the source documents.

Gartner has reported that the PC market was modestly affected by the U.S. recession, but noted that there was no fundamental change in market conditions.

One surprise to see on the list was Dell Inc. (NASDAQ: DELL) if you have paid attention to that stock bloodbath.  Its Q1 market share globally was 14.9%, up from 13.7% from Q1-2007.  Its total shipments also grew to 10.579 million from 8.688 million in the same periods. But inside the U.S., Dell’s U.S. market share is listed as 31.4% on some 4.775 million PC units shipped, up from 27.9%  and 4.126 million PC-units shipped in Q1-2007.

When you compares this to Hewlett-Packard (NYSE: HPQ), H-P did grow globally as well.  But in the U.S. it showed a slight drop in market share and in units shipped.  When you compare Dells and H-P stock prices, these results are very surprising.  Should this be interpreted as a potential "regaining ground" from Dell?

But the strength of Apple Inc. (NASDAQ: AAPL) is continuing to impress on a raw number basis.  Apple is more strong in the U.S. than internationally because of its prices, but its market share for US shipments for Q1 2008 was 6.6% with some 1.01 million units shipped.  That compares to a 5.2% market share and 762,000 units shipped in Q1-2007.

In a separate release from IDC, the data is a tad different but many of the trends are similar.  It noted that Dell enjoyed its strongest quarter in almost two years.  The impact of new retail presence and growing strength in the portable market propelled the company to a 21.6% improvement in shipments. Dell enjoyed strong portable growth in all major regions except Canada.

IDC also showed that Apple saw similar gains in Q1 in the U.S. with a 6% market share on 950,000 shipments, up from 4.9% market share and 759,000 shipments from Q1 2007.

What is obvious in comparing these two reports is that H-P is still king.  But its lead is no longer an absolute and competition is likely only to get tougher rather than easier.

Jon C. Ogg
April 17, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.