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Dell jumps ranks in notebooks

Notebook vendors are focusing on inventory control and profitability at the expense of market share this quarter, a new report says.

Amid a shakeup in their domestic market rankings, notebook vendors are focusing on inventory control and profitability at the expense of market share this quarter, a new report says.

Dell Computer jumped up to the No. 3 position, pushing IBM back to No. 4, according to market research firm International Data Corporation.

In the culmination of a long-term trend, Compaq Computer and Toshiba switched positions, as Compaq claimed the No. 1 spot with 17 percent of the market.

"Compaq was very, very aggressive with their product line expansion," said Randy Giusto, mobile computing analyst for IDC. "It has no inventory problem that we can tell."

Today's news is yet another indication that Dell's strategy for customer relationships, leasing programs, and buying plans is succeeding.

Miroring the success the company has enjoyed in desktops, Dell's direct sales model allows it to manage its inventory effectively and cut out the cost overhead incurred by vendors selling through retail channels. Dell's market share grew to 12 percent this quarter.

Toshiba and IBM were willing to sacrifice short-term market share declines this quarter as they got a handle on inventory problems, Giusto noted. "Toshiba scaled back inventory. It was willing to give up the crown to improve profits and inventory," he noted. "Profitability--not market share--is now the indicator of success [for notebook vendors]."