Dell shows fastest PC sales growth in sluggish Q4

NEW YORK: Global sales of personal computers slowed sharply in the fourth quarter, but the industry's second-largest player, Dell Computer Corporation, took market share on strong sales growth, two research companies said on Friday.

Major personal computer makers cut sales forecasts or turned in poorer-than-expected results for the last quarter, when holiday buying unexpectedly slumped. Many industry observers have blamed economic uncertainty and a slower upgrade cycle for the weaker sales.

But a "saturation of the consumer market and a general lack of compelling reasons to buy may be more serious concerns," said Loren Loverde, director of research for International Data Corp. said in a statement. Fourth-quarter global growth in personal computer sales was 9.2 per cent, a sharp slowdown from the rate earlier in the year, according to IDC.

Figures from competing market research firm Dataquest estimated the growth rate at 10.1 per cent in the quarter with 37.9 million units sold. Dataquest said the slow close to the year dragged the annual growth rate for all of 2000 to 14.5 per cent, down from 23 per cent in 1999 and between 15-16 per cent in 1998 and 1997.

Both research firms said Compaq Computer Corp. remained the top personal computer vendor in unit terms, but posted the slowest growth of the top four companies. Dell gained the most. IDC showed Dell gaining 2 percentage points of market share with 30.9 per cent growth in the fourth quarter, while Dataquest said Dell unit sales rose 41 per cent.

Hewlett-Packard, the third largest computer maker, also grew strongly, at just under 19 per cent, both firms said. Bear Stearns analyst Andrew Neff said that Dell's growth positioned it to take the worldwide market share leadership position from Compaq in a year or two. But he said the strong showing doesn't necessarily mean there is upside to his sales estimates for Dell.

Gartner also said that slow sales at Apple Computer Inc. weighed on the industry-wide data. "Apple's shipments in the U.S. and worldwide markets fell by 50 per cent and 40 per cent respectively. Had Apple achieved flat growth total market growth would have been almost 2 percentage points higher in the US and one percentage point higher worldwide," Gartner said.

Both firms saw more opportunity for PC sales growth outside the United States, where people and businesses own fewer computers.

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