Dell Sees PC Rivals Catching Up

19 October 2005

Cracks are appearing in the seemingly invincible computer stronghold that is Dell Computer.

The US-based company, whose 'stack it high sell it cheap' strategy has kept it ahead of all rivals for many years, is showing signs of slippage in the numbers of PCs it ships worldwide.

Latest figures from IT consultancy Gartner show Dell's shipment growth rate was 17.6% in the third quarter, compared with an average growth rate of 17.2% worldwide.

Gartner analyst Mikako Kitagawa says the change reflects a shift from growing market share to increasing profitability. Dell caused nervous flutters on Wall Street in August after Q2 sales failed to meet forecasts despite aggressive price cuts.

Dell's sole comment is that its strategy has not changed and it will "continue to drive balanced and profitable growth".

Number two in the market, Hewlett-Packard saw shipments up by 18.5% in Q3 while Taiwanese manufacturer Acer's shipments grew a robust 54.4%.

However, Gartner forecasts slower growth, averaging 8.9%, in PC shipments next year due to tight margins and an equally tight economy.

Data sourced from Financial Times Online; additional content by WARC staff