In May, longtime market leader Compaq Computer dropped below Toshiba, which regained the top spot by releasing lower-priced mainstream notebook computers based on processors from Advanced Micro Devices, according to research from ZD Market Intelligence.
Meanwhile, perennial market underdog Sony has made significant strides by sticking to its higher performance--and priced--notebooks.
Toshiba recovered the No. 1 position by grabbing 34 percent of the retail market, edging out Compaq, which took 33 percent. Toshiba's gains were probably a result of releasing a raft of aggressively priced systems offering mainstream performance, according to Matt Sargent, an analyst at Market Intelligence, adding that the monthly results may not indicate an overall shift in the market.
Toshiba also saw its retail distribution strategy pay off. The company focused the majority of its shipments into computer stores, shipping 68 percent of its products there, rather than office supply or consumer electronics stores. These PC retailers sold 55 percent of all retail notebooks in May, according to the report. By comparison, Compaq only shipped 45 percent of its notebooks to these stores.
Compaq may be suffering from its management upheaval and larger corporate problems, Sargent speculated, but cautioned against reading too much into one month's sales. "It's really too early to say they've done anything wrong, even though they have some overall issues.
"We tried to pull this apart and figure out why, but it wasn't really clear," said Sargent. "It appears to be a seasonal shift."
Toshiba's gains can also be traced to its strategy in the price-sensitive retail market. Toshiba's prices are the lowest in the retail notebook market, 5 percent below the average, the report found. But that reasoning doesn't explain the recovery Sony has undergone in the retail market.
Sizing up Sony
The price of an average Sony notebook is $1,830, higher than Toshiba, Compaq, or IBM, which ranked No. 4 in the retail market with 11.7 percent. But despite its relatively higher prices, Sony notebook market share has skyrocketed, from .3 percent in May of 1998, to 13.7 percent this past May, propelling the company past IBM into third place.
Although Sony's prices are not as high as they once were, the company has mainly focused on streamlined designs and performance systems, and the strategy appears to be paying off, Sargent said.
"Sony's pushed up real well," he said. "Their year-over-year volume increase is just amazing. There's definitely a market for a sexy product, differentiated on functionality and performance."
The study focused only on retail sales, and did not track shipments of direct sellers like Dell Computer or Gateway. Studies earlier this year from International Data Corporation and PC Data also concluded that Toshiba had regained the top position in the retail notebook market.