Tech Industry

Compaq maintains low-cost lead

Compaq claims 67 percent of all machines sold in the sub-$1,000 market, a newly significant segment that chalked up 27 percent of all PC sales last month.

Capitalizing on the popularity of low-price computers sold in retail outlets, Compaq has boosted its desktop market share over the last three months.

Sales of PCs priced below $1,000 accounted for 27 percent of the total market in September, according to market researcher Computer Intelligence (CI). That's down from a surprising PC sales 39 percent the month before, but Compaq's phenomenal 67 percent of the newly significant market in September (and 72 percent in August) has been a key factor in gaining overall desktop leadership.

Compaq's competitors couldn't even come close. Packard Bell, which came in second, captured only 20 percent of the market for PCs priced under $1,000 in September, up from 16 percent the month earlier.

Other major manufacturers, like Hewlett-Packard and IBM didn't even register double figures.

"Compaq has been able to displace the traditional 'price' brands, and is forcing other mainstream manufacturers to scramble to react," CI analyst Matt Sargent said in the report. "What is amazing is that, so far at least, the rest of the industry seems to be letting Compaq walk away with this market."

Sargent added that Compaq appeared to be in a good position to continue its rally through the holiday season.

Sales of PCs priced between $1,000 and $1,500 are also showing healthy growth. In September, midrange machines chalked up 39 percent of the market, compared to 35 percent in May. Sub-$1,000 That category reached at high in July with 48 percent, according to the report.

Compaq's overall market share was 37 percent for September, 12 percentage points higher than the runnerup, Packard Bell, which claimed 25 percent. The gap between the two vendors was even larger for the month of August, when Compaq captured 44 percent of the market, compared to Packard Bell's 20 percent. In September of 1996, Compaq and Packard Bell were tied with 29 percent of the market.