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Tech Industry

Compaq atop PC heap

An industry survey concludes that Compaq is tops in the PC market and that corporate sales are where the growth and profits lie.

    The fourth quarter's U.S. sales results are in, and Compaq (CPQ) is the number-one personal computer vendor, according to Computer Intelligence (CI), a computer and communications industry market research firm.

    Without any significant new technology to draw consumers to stores, PC sales in the retail sector were not as strong as vendors had hoped. CI's survey shows, however, that corporate demand as well as second-time buyers helped total PC sales to reach 7.7 million units, a 15 percent increase over the same period in 1995.

    "PC makers who focused solely on the consumer market for the fourth quarter missed one of the strongest growth segments of the year. The highest growth and strongest profits are now clearly in the corporate market," said Matt Sargent, senior analyst with CI, in a written statement.

    In both consumer and commercial markets, Compaq is the number-one PC vendor with a 14 percent market share. IBM (IBM) placed second with a 9.6 percent market share on the strength of sales to large corporations, CI said. Packard Bell was third with an 8.5 percent market share.

    Compaq strengthened its number-one position in the consumer market relative to Packard Bell, posting a 21 percent gain in market share over the same period a year ago, and now commands 23 percent of the retail market. Packard Bell's market share declined by 40 percent to 18 percent of the retail market, according to the survey.

    It was in July of 1996 that Compaq first overtook Packard Bell as the top vendor in the overall retail market, which includes purchases at the PC superstores, consumer electronic stores, and office superstores where Packard Bell once ruled. At the time, CI's Sargent said that second-time buyers were driving purchases in the retail channel, and the most recent survey restated those opinions.

    The only company to lose more market share than Packard Bell in the retail channel was Apple (AAPL). Sales of its Performa models slumped, and the company saw its share of the retail channel decline by 59 percent over the same period in 1995.

    Toshiba made the largest strides in the retail channel, posting a 114 percent gain over last year's results. Toshiba now has an 18 percent market share in the retail sector and could overtake Packard Bell soon.

    Toshiba's gains were due to the popularity the Infinia line of home computers that were introduced in the fall of 1996. The Infinias strongly diverge from the boxy design of most computers and have features such as a push-button panel with an LCD screen for displaying command options for using the built-in TV. Another consumer convergence technology included is a built-in radio.

    In the commercial sector, CI says that the migration to Windows NT helped drive sales, with small and medium-sized businesses (those with less than 500 employees) spurring sales early in the fourth quarter. Large firms with more than 500 employees tended to do their purchasing late in the quarter, the report said.

    As measured in the dealer channel, which serves the commercial market, Compaq maintained its number-one position, posting 63 percent growth over last year, but its lead over IBM was actually trimmed somewhat. While Compaq now has 35 percent market share in the dealer channel, IBM has 29 percent, up from 19 percent a year ago.