In one of the closest contests in recent memory, less than one percentage point separated the first- and second-place finishers, with the other two contenders close behind, according to preliminary fourth-quarter data from market researcher Dataquest.
The overall notebook market shows surprising resiliency compared with desktop PCs. Worldwide, notebook shipments grew 21 percent year over year during the fourth quarter compared with paltry desktop PC growth of 1.6 percent, Dataquest concluded. In the United States, notebook shipments increased 6 percent from a year earlier, while growth of desktop PC shipments stalled at one tenth of one percent.
IBM, which completely refreshed its ThinkPad portable line, captured the top spot in worldwide notebook shipments during the fourth quarter. With 13.5 percent market share, Armonk, N.Y.-based IBM toppled Toshiba, which, at 12.5 percent share, lost 1.5 points year over year and fell to third place.
But the leaders are bunched together in a tight competition for market share. Second-ranked Dell Computer moved up one position from a year earlier, gaining 1.5 points to 13 percent share, according to Dataquest. Compaq Computer dropped from third to fourth place year over year with 12 percent market share. Sony knocked NEC out of the fifth place, gaining 1.5 points to 6.5 percent share.
Dataquest analyst Mostafa Maarouf commented on Toshiba's change in fortune from fourth quarter 1999 to 2000.
"Toshiba has been losing share in the corporate space, and most of that is going to Dell," he said. "Toshiba may have lost a little share, but they still have strong initiatives in the corporate space with regard to notebooks."
After navigating a rough product transition during the fourth quarter, Toshiba on Monday launched new laptops, including one model with a combo CD/DVD/CD-RW drive.
Sony moved into fifth place partly on robust sales in Japan and on the strength of U.S. retail gains, where the company has, along with Hewlett-Packard, knocked 20 points off leader Compaq's position.
Compaq had long led the retail notebook market with a more than 40 percent market share. But after nearly five months of share erosion, Sony in December closed the gap to about one point at stores, with 21.3 percent share to Compaq's 22.5 percent, according to PC Data.
In overall December retail, Compaq had 31.2 percent market share compared to Sony's 26.6 percent. A month earlier, Compaq had 31.8 percent share versus 24.5 percent for Sony.
Part of Compaq's problem is a shift in Sony's pricing strategy, said ARS analyst Matt Sargent.
"Compaq focused too much on the low end, while Sony moved from the high end down into the middle market," he said. "This cost Compaq substantial share."
In November, the two companies kicked off a brutal price war as they struggled over the No. 1 retail sales position.
Sony also is eyeing the corporate notebook market closely, which could boost its share position in coming quarters. "Sony is indicating they may soon release corporate models," Sargent said. "They would be a tough competitor entering that space."
Dell continued to lead the U.S. notebook market during the fourth quarter, gaining 4.5 points year over year to 25 percent share, according to Dataquest. A far distant second, IBM knocked Compaq down one position, with 15 percent market share. But IBM's gains came more from Compaq's mistakes. Big Blue's market share remained flat year over year, while Compaq lost 3.5 points to 13.5 percent share. Toshiba and HP followed with 11 percent and 8 percent share, respectively.
"HP has been growing really, really fast in the mobile space," Maarouf said. "They more than doubled their mobile shipments in the U.S. since a year ago. They're going pretty hard after the corporate notebook space."
At the same time, Dell's impressive market share gains resulted from aggressive price-cutting, Dataquest concluded. But the long-term benefits are uncertain.
"When times get tough, people slash prices," Maarouf said. "The ones that choose to will gain a little share in the short term."
Overall, the notebook market is expected to show greater elasticity recovering from the computer sales slump than PCs. Although average desktop PC prices hover around $900, notebooks show strong growth even with mean selling prices in the $1,700 to $1,800 range.
One issue is better perceived value over PCs, which are more largely viewed as utilitarian commodity products, say analysts.
"If you're an IT manager picking desktops versus notebooks, if the value is there you'll go out and make the purchases even if there is a $700, $800 price gap," Maarouf said.