Gartner Says Hewlett-Packard Retakes the No. 1 PC Position Based on Worldwide Shipments in Third Quarter of 2006

Worldwide PC Shipments Increase 7 Percent, While U.S. PC Shipments Decline 2 Percent

STAMFORD, Conn., October 18, 2006 — For the first time since the fourth quarter of 2003, Hewlett-Packard moved into the No. 1 position for worldwide PC shipments in the third quarter of 2006, according to preliminary results by Gartner, Inc. The preliminary statistics show that HP’s lead over Dell is 110,000 units.

Worldwide PC shipments totaled 59.1 million units in the third quarter of 2006, a 6.7 percent increase from the same period last year. The U.S. PC market experienced a year-over-year shipment decline of 2 percent. The last time the U.S. PC market suffered a decline in PC shipments was the second quarter of 2002.

HP performed well across all regions, as its worldwide PC shipments in the third quarter of 2006 increased 15.4 percent year-over-year, and its market share reached 16.3 percent. Dell experienced its lowest year-over-year growth in the company’s history, as worldwide PC shipments increased 3.6 percent in the third quarter, and its worldwide PC market share slipped to 16.1 percent. Dell’s shipment growth rates were below the industry averages in the U.S. and Europe, Middle East and Africa (EMEA) regions.

“HP continues to take better advantage of the faster growth segments such as the consumer market. The company’s share trajectory reflects its improvements in operational execution and changes in marketing,” said Mikako Kitagawa, principal analyst for Gartner Dataquest’s Client Computing Markets Group. “Dell felt the effects of the weak sales in the U.S. market, and it gave up some ground.”

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q06 (Thousands of Units)

Company	3Q06 Shipments	3Q06 Market Share (%)	3Q05 Shipments	3Q05 Market Share (%)	3Q06-3Q05 Growth (%)
Hewlett-Packard	9,652	16.3	8,361	15.1	15.4
Dell Inc.	9,541	16.1	9,210	16.6	3.6
Lenovo	4,444	7.5	4,035	7.3	10.1
Acer	3,468	5.9	2,600	4.7	33.4
Toshiba	2,551	4.3	1,955	3.5	30.5
Others	29,486	49.9	29,256	52.8	0.8
Total	59,143	100.0	55,417	100.0	6.7

Note: Data includes deskbased PCs, mobile PCs and X86 servers. Workstation shipments are not included.
Source: Gartner Dataquest (October 2006)

“Two factors that contributed to the poor performance in the U.S. market were continued weakness in the professional deskbased market, and the carry-over effect from strong sales in the second quarter,” said Ms. Kitagawa. “Strong sales to the home market, fueled by solid back to school sales and mobile PCs could not offset the decline in other areas.”

Dell held onto the No. 1 position in the U.S. PC market in the third quarter of 2006 despite a 7.1 percent decline in shipments year-over-year (see Table 2). The company suffered from weak deskbased PC growth, which offset solid mobile PC growth across all segments. HP capitalized on strong demand in the home market. Offerings of AMD-based systems aimed at consumers helped HP’s performance in the home market.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q06 (Thousands of Units)

Company	3Q06 Shipments	3Q06 Market Share (%)	3Q05 Shipments	3Q05 Market Share (%)	3Q06-3Q05 Growth (%)
Dell Inc.	5,113	32.1	5,506	33.9	-7.1
Hewlett-Packard	3,657	23.0	3,439	21.2	6.3
Gateway	1,013	6.4	1,024	6.3	-1.1
Apple Computer	975	6.1	744	4.6	31.0
Toshiba	813	5.1	664	4.1	22.3
Others	4,352	27.3	4,865	30.0	-10.6
Total	15,923	100.0	16,243	100.0	-2.0

Note: Data includes deskbased PCs, mobile PCs and X86 servers. Workstation shipments are not included.
Source: Gartner Dataquest (October 2006)

In the Europe, Middle East and African (EMEA) region, PC shipments totaled 18.5 million units in the third quarter of 2006, a 9.1 percent increase from the same period last year.

“The EMEA market was driven by a strong consumer segment that had low price points on entry level models, and above average sales in Central Eastern Europe and Middle East and Africa markets. HP extended its lead as the No. 1 vendor in the region, while Acer closely edged out Dell to reach the No. 2 position and Lenovo showed growth again after some restructuring of their supply chain,” said Ranjit Atwal, principal analyst for Gartner’s computing platform group in EMEA.

Table 3
Preliminary EMEA PC Vendor Unit Shipment Estimates for 3Q06 (Thousands of Units)

Company	3Q06 Shipments	3Q06 Market Share (%)	3Q05 Shipments	3Q05 Market Share (%)	3Q06-3Q05 Growth (%)
Hewlett-Packard	3,291	17.8	2,727	16.1	20.7
Acer	2,080	11.2	1,521	9.0	36.7
Dell Inc.	2,078	11.2	1,944	11.5	6.9
Fujitsu/Fujitsu Siemens	1,165	6.3	1,269	7.5	-8.2
Toshiba	857	4.6	599	3.5	43.1
Others	9,046	48.9	8,911	52.5	1.5
Total	18,515	100.00	16,970	100.0	9.1

Note: Data includes deskbased PCs, mobile PCs and X86 servers. Workstation shipments are not included.
Source: Gartner Dataquest (October 2006)

The contrasting vendor performances this quarter divided the PC market in EMEA into two groups. On one side, Dell and Fujitsu Siemens failed to beat the average market growth, whilst Acer, Sony and Toshiba performed well above the market average by focusing on mobile PC sales.

“Overall, Dell has under-performed the market for the first time since 2000,” said Mr Atwal. “It saw a decline in desk-based PC shipments as purchases in large businesses slow downed and was also impacted by a very strong performance by Hewlett-Packard this quarter, whose business model allowed them to achieve growth across both consumer and business segments.”

The EMEA PC market has also shifted from an over supply of mobile PCs to a potential under supply as the market grew faster than expected. With a predicted strong consumer demand in the lead up to Christmas this could cause PC vendors supply issues. The consumer PC market continued to grow strongly bolstered by aggressive deals and falling average selling price (ASP). Acer was very active in this market with entry level deals especially in UK which helped them exhibit the second highest year on year growth this quarter.

Gartner estimates that the PC market in EMEA will see double digit growth in the fourth of quarter of 2006, however, 2006 will still be a weaker year than 2005.

Third quarter PC shipments in Asia/Pacific increased 13.7 percent from the third quarter of 2005, as shipments reached 15.1 million units. Most countries exhibited positive growth rates, with the exception of New Zealand and Taiwan where growth declined. Mobile PC shipments grew 31 percent, while deskbased PCs are estimated to have grown 9.6 percent.

The Latin America PC market experienced year-over-year growth of 20 percent with shipments totaling 4.6 million units in the third quarter of 2006. Mobile PCs increased 65 percent, while deskbased PCs grew 15 percent. Brazil’s performance in notebooks was exceptional with 100 percent growth. Brazil is getting closer to Mexico’s overall mobile PC shipment levels.

In Japan, third quarter PC shipments declined 3 percent compared to the same period last year with shipments of 3.5 million units. Deskbased and mobile PC shipments were in line with Gartner’s expectations of almost flat shipment growth in the professional market, and high single to double-digit percentage declines in the consumer market.

These results are preliminary. Final statistics will be available soon to clients of Gartner's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on Gartner's Computing Hardware section on Gartner's Web site at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.

Contacts:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com

Laurence Goasduff
Gartner
+ 44 1784 267 195
laurence.goasduff@gartner.com


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