Hewlett-Packard's sale surpasses Dell

Former Hewlett-Packard Co. (HP) chief executive officer Carly Fiorina must be smiling right now. When Fiorina was at HP's helm, her strategy to acquire Compaq Computer partly in order to build the world's leading PC brand eventually led to her ouster due to opposition to the deal from the company's board of directors. Less than two years later, in the third quarter of 2006, her strategy finally came to fruition as HP surpassed Dell Inc. to become the world's largest PC seller, according to a preliminary market share ranking from iSuppli Corp. HP shipped 9.9 million PCs in the third quarter of 2006, up 16.7 percent from 8.4 million during the same period in 2005. This exceeded the 9.5 percent expansion of the overall PC market and the 3.4 and 10.4 percent increases for HP's two closest rivals, Dell and Lenovo. This caused U.S.-based HP's market share to rise to 16.5 percent, up from 13.6 percent in the second quarter, putting it two-tenths of a point ahead of Dell, according to iSuppli's preliminary top-five ranking, presented in the table below and attached. iSuppli Table: Preliminary Ranking of the World's Top-Five PC Makers in the Third Quarter of 2006 (Ranking by Unit Shipments in Thousands) Ranking, Company, Q3 2006 Shipments, Q3 2005 Shipments, Year to Year Growth, Q3 2006 Market Share 1, Hewlett-Packard, 9,860, 8,449, 16.7%, 16.5% 2, Dell, 9,777, 9,452, 3.4%, 16.3% 3, Lenovo, 4,465, 4,044, 10.4%, 7.5% 4, Acer, 3,205, 2,485, 29.0%, 5.4% 5, Toshiba, 2,478, 1,998, 24.0%, 4.1% Others, 30,074, 28,224, 6.6%, 50.2% Total Shipments, 59,858, 54,680, 9.5%, 100.0% Source: iSuppli Corp. November 2006 "HP posted a memorable third quarter," said Matthew Wilkins, principal analyst with iSuppli. "Its sales grew by double-digit percentages both on a year-to-year and on a quarter-to-quarter basis. Due to this rapid sales growth, HP has once again become the world's largest PC maker, a position it has not held since 2003." HP capitalizes on Dell's dilemma In contrast, newly second-ranked Dell reported a sequential decline in shipments to 9.8 million units, down 1.9 percent from 10 million units in the second quarter. While U.S.-based Dell's third-quarter shipments rose by 3.4 percent compared to the same period in 2005, this represented only about one-third of the growth rate for the PC industry as a whole. "HP's positive news is in part due to Dell's problems," Wilkins observed. "The U.S. market caused some challenges for Dell. HP was less affected by these challenges due to its strong presence in other regions." Asian PC maker roundup Lenovo of China remained in third place with shipments of 4.47 million units, up 10.4 percent from 4 million in the third quarter of 2005. Having grown faster than the industry as a whole, Lenovo's unit market share rose to 7.5 percent, up from 7.4 percent during the third quarter of 2005. Taiwan's Acer Inc. continued its impressive growth streak in the third quarter, with its shipments rising to 3.2 million units, up 29 percent from 2.5 million in the third quarter of 2005. This represented the strongest growth of the top-five PC sellers, allowing Acer to maintain its fourth-placed ranking. Toshiba Corp. of Japan also delivered solid unit growth of 24 percent, and as a result gained entry into the top-five ranking in the third quarter with shipments of 2.5 million units. The company ranked sixth in the second quarter. A healthy quarter for PCs Overall, third quarter PC shipments rose at a healthy year-over-year rate of 9.5 percent, coming in at 59.9 million units, up from 54.7 million during the same period in 2005. "The PC industry had been holding its breath regarding unit shipments in the third quarter, following disappointing results in some segments in the second quarter," Wilkins said. "However, the accelerated year-over growth of the third quarter has allayed those fears." The performance of the desktop segment in the third quarter improved markedly compared to the previous quarter, generating growth of 2.7 percent. "Clearly, the dust has settled from the second quarter hiccup from the imminent arrival of Intel Corp.'s new desktop microprocessor chips and the expected price cuts," Wilkins said. Meanwhile, the notebook PC segment continued its strong momentum with unit shipments rising 24 percent compared to the third quarter of 2005. Demand to continue in the fourth quarter "As we look to the fourth quarter, iSuppli believes that we will see strong demand, in keeping with the holiday season," Wilkins said. "Notebook sales will continue their strong momentum. Recent history has shown that aggressive price cuts among PC makers boost sales during the holiday season. We expect this year to be no different," Wilkins added. “The emergence of a dual-socket consumer platform is critical for enthusiasts who demand systems that offer the sheer power and system headroom to let the enthusiast configure this system to his or her heart's content, and launch a fleet of entertainment and productivity applications at once," said Bob Brewer, corporate v-p of the desktop division at AMD. Features include low-latency unbuffered DDR2 memory and support for non-uniform memory access (NUMA) support with compatible operating systems. The multiprocessor platform inevitably includes an Nvidia graphics processor and according to Drew Henry, general manager of MCP business at Nvidia, the GeForce 8 series graphics processors as well as its nForce 680a media and communications processor are suited for the megatasking requirements of multi-threaded applications, such as next generation games.