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Compaq workstation leads, for now

The PC maker pulls ahead of Hewlett-Packard in the Windows NT-based workstation market, but the lead reflects the timing of an HP product shift.

Compaq Computer pulled ahead of Hewlett-Packard in the Windows NT-based workstation market for the third quarter of the year, according to a market research firm. But analysts say the development reflects the timing of an HP product shift rather than a material gain by Compaq over its rival.

Dataquest reported that out of a total of 71,476 workstations shipped in the third quarter, Compaq took the lead with 28.2 percent, besting HP's share of 25.9 percent.

"We said from the beginning that our goal was nothing less than leadership Windows NT/Intel based 
workstations in this marketplace," Compaq senior vice president John Rose said in a prepared statement. "And we have obtained that goal in an incredibly short period of time."

But analysts note that HP shipments fell in the quarter primarily because of a delayed shift from the company's Vectra to Kayak line of workstations. Many orders received in the third quarter have been and will continue to be shipped this quarter, in which HP is expected to recover its lead.

"Compaq has done extremely well," said Dataquest analyst Peter ffoulkes. "But HP has been in the workstation business a long period of time. Compaq and HP will be vying for market leadership for a long while, and I wouldn't like to have to predict who's going to be ahead in a year."

Ffoulkes noted that the NT workstation market is a relatively new one, which Dataquest started tracking only this year. In the first quarter, HP led Compaq 38.8 percent to 27.5 percent on a volume of 66,092 units. In the second quarter, HP led Compaq 41.6 percent to 32.5 percent on a volume of 55,608 units.

Workstations are high-performance computers typically used for such tasks as multimedia applications or computer-aided design. The computers range in price from a few thousand dollars to $20,000 and more.

The market initially was composed of computers based on the Unix operating system and a RISC processor, but late last year Windows-based versions began hitting the market. Windows-based workstations have made significant inroads against the Unix-based standard since that time, especially as increased processing power has enabled them to break out of the low end of the workstation market.

Compaq introduced its first NT workstation in October 1996, a month after Hewlett-Packard's NT debut.

Dataquest's ffoulkes predicted that eventually Windows-based workstations would dominate the market.

"Unix growth has been arrested by Windows and Intel-based workstations," he said. "It's beginning to go into a steady decline, though there is a substantial amount of business for many years to come."

Other significant players in the Windows-based workstation market include IBM (which also produces a Unix workstation), Dell, and Digital Equipment. Silicon Graphics has announced its intention to market a Windows-based machine along side its currently available Unix version.