HP Pulls Away from Dell in iSuppli Q4 2006 Rankings

Dell's global market share in PCs was expected to have slipped last year, but the question on the mind of new CEO Michael Dell was, how badly? Today, the first preliminary numbers from electronics research firm iSuppli are in, and though it's bad news, it might not be devastating: Dell lost 1.6% in global PC market share between 2005 and 2006, and its PC shipments declined 8.6% for the year. Hewlett-Packard, meanwhile, gained 2.7% of market share for the year, and shipped more than 20% more PCs than Dell during the fourth quarter.

While Dell will be happy to claim the #1 position worldwide for last year, by virtue of its relatively stronger performance during the first half, few are under the illusion that this title reflects the current state of affairs.

According to iSuppli's preliminary analysis, HP shipped 21.5% more PCs in the fourth quarter of last year than for the prior year. This in a market which overall grew at a pace more sluggish than predicted, with only 6.3% growth annually. Dell was the only member of iSuppli's Top 5 PC manufacturers to report shipment declines.

But Dell's losses aren't entirely HP's gains. Coming on very strong, with the prospect of unseating Lenovo as the #3 PC supplier this year, is Acer, with an annual shipments growth rate of 42.7%, by iSuppli's estimates. While Acer's shipments were 42% behind Lenovo's in Q4 2005, they were only 8% behind in Q4 2006.

With a deal announced just yesterday with Best Buy to make Acer notebook computers available in retail outlets, just that much expansion of Acer's brand presence alone could be enough to displace the ThinkPad manufacturer.

The chart above should give you an idea of the kind of "waltz" maneuver that PC sales numbers typically display, with a little arc that dips down toward quarters 1 and 2 for the year, and peaks at Q4. HP did that dance very, very nicely last year, whereas Dell's missteps become painfully obvious. This chart clearly shows whose feet did the quick step, and whose feet were stepped upon.

In a prepared statement this morning, iSuppli principal analyst Matthew Wilkins proclaimed, "HP's resurgence was the most remarkable event in the PC industry in 2006. The company clearly has momentum on its side."

Wilkins went on to predict that, with Dell busy reorganizing its upper ranks and formulating a new strategy, HP could very well pull away throughout the rest of this year.