Compaq, Dell in race

Dell Computer Corp. nears top market slot by capitalizing

on Compaq Computer Corp.'s ongoing turmoil. But, Compaq held on to a generous lead

worldwide according to recent surveys.

Battle for market share took place as global shipments of

PCs grew nearly 27 per cent to 25 million units during the second quarter, in the wake of

a broad recovery in the world's major geographic regions and amid strong consumer PC

demand.

Second-quarter market statistics compiled by research firms

Dataquest and International Data Corp. (IDC) showed Compaq narrowly retaining its US lead

over direct PC supplier Dell - but only by a fraction of a percentage point.

Dataquest counted Compaq with 16.8 per cent of PC shipments

in the United States, against Dell's 16.4 per cent and IDC put Compaq at 16.6 per cent

versus 16.3 per cent for Dell. Estimates varied due to slight variations in what the

research groups classify as PCs.

Compaq shipped an estimated 1.80 million PCs in the US in

the second quarter of 1999, versus Dell's 1.77 million. Compaq is working to simplify its

distribution strategy but has been distracted by the cleaning of its top executive team

during the past three months, leading analysts to believe that Dell may see further gains

heading into the fall.

According to analysts, there is potential for Dell to

overtake Compaq in the third quarter.

In the latest quarter, according to Dataquest Compaq

remained No. 1 worldwide with 13.8 per cent of the market, compared with Dell's 10.2 per

cent and IDC put Compaq with 14.6 per cent globally against Dell's 10.8 per cent.

Compaq has been the No. 1 PC maker in the world since 1994,

when it leaped ahead of International Business machines Corp and Apple Computer Inc. from

No. 3 in 1993 and Dell has been the top supplier of direct-from-the-factory,

custom-configured PCs.

Dell is cashing in on growing demand for direct sales via

the Internet. But Compaq has struggled to meet the direct demand while continuing to rely

on indirect PC distribution to businesses and through retailers to consumers.