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Server shipments surged last quarter

Unit sales jumped 21 percent to 1.37 million in the third quarter compared with 2002, with IBM posting the biggest gain.

Server shipments jumped 21 percent to 1.37 million in the third quarter compared with 2002, according new figures released Thursday.

Preliminary information from market research firm Gartner indicates that for the third consecutive quarter, unit shipments increased more than 10 percent compared with the year earlier. However, because much of the increase can be attributed to low-priced systems, revenue growth will likely be more limited, Gartner said.

Hewlett-Packard, the leading seller of servers that are based on Intel processors, was the top-ranked company for the quarter, with 408,000 units sold. Intel-based servers ship in much larger quantities than do Unix servers, mainframes or other varieties, because they tend to be less expensive.

HP's shipments increased 21 percent compared to the year earlier. Sales by second-place Dell jumped 28 percent to 276,000, Gartner said.

No. 3 IBM grew even faster, with sales surging 37 percent to 220,000, while No. 4 Sun Microsystems shrank 3 percent to 60,000.

Sun, which for years only sold servers that used its own UltraSparc processors, has admitted to belatedly realizing that it should also sell Intel-based systems. However, sales of its Intel servers haven't yet cracked the top 10; Sun sold fewer than 7,215, according to Gartner's statistics.

The results largely reinforce prevailing trends among the top four server sellers: IBM continues to grow the fastest, Dell makes gains in its specific market, HP?s growth trails some rivals and Sun struggles.

Servers are powerful computers that handle round-the-clock chores such as sharing files on a network, recording voice mail or processing bank transactions. Servers also power Internet services as basic as looking up electronic addresses and as complicated as searching for text in books on

Many companies splurged on hardware such as servers in the late 1990s but sharply curtailed spending with the economic downturn and dot-com crash that began in 2000.

While shipment statistics are significant, Gartner hasn't yet released quarterly data on revenue, which better reflects the large portion of the server market that features a small number of expensive machines.