Round Rock (TX) - It could just be that the rest of the PC market is finally starting to catch up. But when the latest IDC Quarterly PC Tracker report showed a lower rate of growth for PC market leader Dell, with US sales growth dipping to a mere 1% annual rate for the company, the red flags were raised for traders on Wall Street. Just before lunchtime on the East Coast, Dell’s trading value on the NASDAQ fell by more than 2%, before leveling off toward the end of the day with a 1.25% loss at about $28.25 per share.
There’s definitely a momentum loss for Dell, reports IDC’s Loren Loverde and Bob O’Donnell, and it’s being picked up by Hewlett-Packard and - if you can believe it - Gateway, which could at long last use some good news. Worldwide, IDC says, the PC market is growing at a rate of 12.9% annually, but Dell’s sales growth worldwide came in at 10.2% for the quarter just ended, with sales growth for the US in particular slowing from 8% over the holiday season to an astounding 0.3% in Q1 2006. The US PC market as a whole grew at an annual rate of 5.3% in the first quarter, dragged down in large part by Dell as growth figures for HP - the world’s #2 - remained strong.
While Dell’s year-over-year growth was weighted down to just over 10%, HP shows 22.2% year over year growth, with numbers that could threaten Dell’s catbird seat if this keeps up into next year. Worldwide, Dell shipped 9.64 million PCs between January and March, or 18.1% of the global market, according to IDC’s numbers. But HP’s gains meant it shipped 8.7 million PCs worldwide in Q1. So while Dell’s market share slipped by half a point over Q1 2005, HP’s gained by 1.3% in the same period, with the gap between the two narrowed to a mere 1.7%. For the US, the numbers are equally foreboding for Dell, shipping just under 5 million units nationwide in Q1. But Dell can no longer claim a full third of the US market, with a 1.6% dip in market share year-over-year, all of that amount - and then some - usurped by HP, gaining 1.8% in US market share, with just over 3 million units shipped.
States IDC this afternoon, "It appears that [HP’s] efforts to boost volumes with channel partners are paying off."
