Hewlett-Packard, meanwhile, took back the unit shipment lead from Dell Computer by shipping 120,000 more computers than Dell in the fourth quarter. HP's surge largely came as the result of strong consumer sales and aggressive price cutting, said Jim McDonnell, vice president of marketing in the personal systems group at HP. The fourth quarter is traditionally a more consumer-oriented quarter. In the second quarter, HP became the largest PC maker for the first time, through its merger with Compaq Computer. Dell then snatched the lead from HP in the third quarter by a hair. Still, the HP-Dell battle for dominance will go on as HP continues to shrink and Dell continues to grow. In the fourth quarter, HP saw its worldwide shipments contract by 9.8 percent and its market share decline from 18.5 percent to 16.1 percent. Meanwhile, Dell's market shipments rose 24.2 percent and its market share increased from 13.2 percent to 15.7 percent. In the United States, Dell remained No. 1 in the fourth quarter with 29.2 percent of the market share, because of a 24 percent growth in shipments. HP's US shipments shrank by 6.1 percent, leaving it with a 20.8 percent share in the states. HP's McDonnell, however, noted that HP's shipments have risen sequentially for the past two quarters. Fourth-quarter shipments, in fact, grew by 21 percent worldwide over third-quarter shipments, according to IDC's figures. Dell's shipments grew only by 16 percent while the market as a whole saw shipments grow sequentially less. "Dell has a lot of momentum. It grew at rates above 24 percent, year over year," Loverde added. "HP is doing well relative to its merger issues, and it also means that we could have a pretty close race, here for a number of quarters." By the second quarter, HP will once again see its PC shipment grow, McDonnell added. The two companies will also likely continue to try to undercut each other in price, in both the consumer and business markets. Recent reports show that many of HP's business desktops, for example, are priced within a few dollars of similar Dell systems. The also-rans
Other manufacturers received mixed report cards when it came to growth. Gateway increased shipments in the fourth quarter but saw its market share decline slightly in the United States. For the year, Gateway's US shipments declined by 15.4 percent, more than those of any other large manufacturer, leaving it with a 5.7 percent market share for the year. IBM, the world's third-largest PC maker worldwide and the fourth largest in the United States, saw market share gains in the fourth quarter globally and in the states. However, on an annual basis, IBM lost ground slightly. Apple Computer, the fifth-largest manufacturer in the United States, saw its US market share rise from 2.9 percent to 3 percent in the fourth quarter. Despite the rebound in shipments, the consumer-driven nature of the fourth quarter, combined with economic uncertainty, may not portend a full-fledged turnaround. Larger-than-expected shipments in the fourth quarter of 2001 and the first quarter of 2002 buoyed forecasts, but then only lead to inventory gluts in subsequent quarters. "We were not expecting a lot out of the fourth quarter, and we got more than we expected," Loverde said. "The home PC market improved from a very difficult year in 2002," Charles Smulders, an analyst at Gartner, said in a statement. "The professional market showed no sign of a recovery during the year. Faced with a high degree of uncertainty, corporations more frequently chose to extend the life of a PC rather than upgrade." Corporate PC buying, a mainstay of the industry, remains in deep-freeze, though some have said that a slight thaw could begin toward the second half. There hasn't been a large corporate buying binge since early 1999, and those machines are aging. Microsoft will also stop issuing bug patches for Windows 2000 and Windows 98, a factor that may nudge some to buy Windows XP machines, some analysts and executives have speculated. Elsewhere in the world, demand in Europe and Japan remained anemic. Asia-Pacific shipments continued to grow faster than anywhere else, but the growth rate is flattening slightly. China "is the fastest growing area in the (Asia-Pacific) region, and it did maintain mid-to-high single-digit growth this quarter, but that growth didn't accelerate a lot from last quarter", Loverde said. "That might mean that it will keep growing, but not accelerate as fast as some people had hoped."
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