By Mark Long / CIO Today. Updated July 18, 2008.
Nearly a year and a half after the return of Michael Dell to the helm of the company he founded, the PC maker finally appears to be on the verge of making a comeback. According to Gartner, Dell's worldwide PC shipments increasing a robust 21.9 percent in the second quarter, fueled by the company's ambitious expansion into retail and other indirect channels.
Another recent PC shipment report from IDC also indicates that Dell's global operations are firing on all cylinders. Dell's growth outpaced the market in all regions, particularly in Europe, the Middle East and Africa, and the Asia-Pacific region, noted Loren Loverde, IDC's PC tracker. The company also continued to see double-digit growth in its core U.S. market, she said.
"Dell's aggressive channel partner program and retail expansion should help drive volume going forward," Loverde said. "On the retail front, Dell recently launched a fleet of service centers within Wal-Mart stores to compete with the likes of Best Buy's Geek Squad."
Faster Than the Market
Dell's share of the global market rose to 15.6 percent in the second quarter -- up from 14.8 percent one year earlier, noted Mita Kitagawa, a principal analyst at Gartner. The company also achieved more than 40 percent year-over-year growth with respect to its global mobile shipments in the last two quarters, she said.
Although Hewlett Packard continues to hang on to the top PC sales position globally, its latest 18.1 percent market share is little changed from what HP held in the same quarter last year. By contrast, Michael Dell told financial analysts at the end of May that his company has been growing "faster than the industry worldwide in all major product categories and regions, and it has been three years since we have accomplished this."
Clearly, Dell is once again breathing down HP's neck in the global race. "Worldwide, we grew units 22 percent while the industry was up 14 percent," Michael Dell said last month. "Looking at our major regions, we grew 11 percent in the United States while the industry was essentially flat."
Dell's CEO also indicated that the company has plans to further expand into retail stores worldwide.
"I think you will see us continue to add all over the world with a focus on the leading and best partners, and on getting further penetration with those partners," Dell said. "The opportunity here is massively larger than 13,000 stores, so we are still more at the beginning of this process."
Despite a worsening U.S. economy, Kitagawa noted that Dell maintained its lead in the U.S. market by posting a robust 11.9 percent rise in PC shipments in comparison with the year-ago period. By contrast, No. 2 HP's U.S. sales rise amounted to 5.6 percent, only slightly ahead of the U.S. average of 4.2 percent.
"U.S. professional units look to have been affected by tightening IT budgets as U.S. business responded to growing economic uncertainty," Kitagawa said.
However, perhaps the quarter's biggest surprise came from Apple, which saw its U.S. PC shipments rise by 38.1 percent. Kitagawa noted that Apple's biggest successes came in the home PC and education market segments.
"Home mobile PCs continue to have momentum in the U.S. market," Kitagawa said. "However, average selling price declines were greater here than in other segments."