HP saw its overall sales grow by 80 percent in the third quarter, compared to the same quarter the year before, while the company's sales to medium and large businesses grew by an astounding 112 percent, according to figures released by International Data Corporation.
The market share figures reflect the effects that brand consolidation is having on the industry. Consumers and businesses are increasingly looking to the "big four" (Compaq, Dell, HP, and IBM) vendors for their equipment, driving the growth of that group faster than the overall market. Still, the dizzying pace of computer sales also means that a 60-plus percent increase in sales can be slower than the competition.
The volatility and pace of this market prompted Roger Kay, a computer analyst at IDC, to observe that growth rates and market shares can't be taken as foolproof future indicators. HP may be on a roll, especially in the biggest segment of the market, but it doesn't mean it will continue.
|Medium and large business desktop sales|
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HP's market share grew from 5 to 7.5 percent in the overall market and from 9.8 to 15.5 percent in the market comprising business and government entities with more than 100 employees, said IDC. HP now hold the No. 5 overall position and the No. 3 position in the medium to large enterprise market.
"They are selling millions of Vectras," Kay said. "Their unit sales aren't as high as Compaq but their unit growth is higher." He then added, "But you shouldn't over interpret it."
Dell, for its part, enjoyed a phenomenal quarter that was nonetheless bested in terms of growth rate by both HP and Compaq. Dell grew by 64 percent overall and 62 percent in the medium and large enterprise market.
Dell went from a No. 4 market share of 7.1 percent in Q3 1996 to the No. 2 position with a 9.7 percent share, according to IDC. In the medium and large enterprise market, the direct seller remained at the No. 2 position and gained three points of market share, shooting from a 16.3 percent share in Q3 1996 to a 19.6 percent share in Q3 1997.
Compaq saw its No. 1 market position in both segments grow. Compaq's overall market share went from 13.5 percent in Q3 1996 to 18.8 percent in Q3 1997, while its share of the medium to large business market went up five points, from 17.3 percent to 22.5 percent, reflecting 74 percent growth.
Meanwhile, IBM saw its share shrink in both the overall market and the business market shrink. IBM's overall sales grew by 7 percent, leading to a market share decline of a point. In the corporate market, IBM's sales fell 3 percent, leading to a market share decline of almost four points.