US PC sales surged 22% in 1999

The strong US economy resulted in a 22 per cent surge in personal computer

sales during 1999, despite higher prices and Y2K concerns. Dell Computer, for

the first time, surpassed Compaq as the largest US PC producer with a 16 per

cent share of the American PC market in terms of units shipped. That compares to

just 12.7 per cent in 1998. Dell shipped 7.02 million PCs in 1999 according to

the Dataquest and International Data Corp market research firms.

By comparison, Compaq shipped 6.86 million PCs for a 15.7 per cent market

share. Compaq still holds a strong lead over Dell on a worldwide basis, in large

part because until recently, Dell has focused its business almost exclusively on

the US market. Still, at 10 per cent of the world market, Dell is only 3 points

behind Compaq. And, Dell could overtake Compaq this year is the almost opposite

sales trend between the two companies continues in 2000.

"Compaq should be looking over its shoulder. Dell, which historically

has a flat fourth-quarter, got enough sales over the Internet to keep it in the

No.1 position in the U.S. for the year. And, that shows people aren't as scared

to buy computers off the Internet as they used to be," said John Brown,

IDC's research director for PC sales. He added that Dell now generates a

whopping $30 million in Web-based sales a day.

Gateway, which has closely followed Dell’s online business model, but which

also maintains some 200 "Gateway Country’" stores, ended 1999 in

third place as its sales grew by 32 per cent, boosting its market share to 9.1

per cent. Hewlett-Packard's share rose to 8.7 per cent from 7.5 per cent in 1998

to give it fourth place. Apple Computer is once again a market factor as the

company finished sixth domestically and seventh worldwide amid strong sales of

its colorful iMacs and iBook laptops.

The big losers of 1999 were NEC and IBM. The latter slipped to fifth place

domestically and third worldwide as it pulled its Aptiva line out of traditional

brick-and-mortar stores. NEC also lost worldwide market share, slipping out of

the top five worldwide computer sellers in the IDC study. It pulled the plug on

the money-losing Packard Bell line that once was synonymous with home computers.