The PC market is shrinking, while Dell Computer continues to gain market share. Confirming grim reports from individual PC makers, market researcher Gartner Dataquest said Wednesday that unit shipments worldwide tumbled nearly 12 percent in the third quarter compared with the same period last year. According to the preliminary results, Gartner said global PC shipments totalled 30.6 million units, down from 34.6 million units in last year's third quarter. US sales showed an even more marked decline, with 10.9 million units shipped--an 18.7 percent drop from 13.4 million PCs in the third quarter of 2000. "In the third quarter (this year), the PC market continued to suffer from the impact of PC saturation in developed markets. And the effects of the US economic downturn came heavily to bear on all PC regions," Gartner analyst Charles Smulders said in a statement. Dell extended its lead in both the US and worldwide markets, nabbing 13.8 percent of worldwide shipments and a full 25 percent of domestic shipments--double that of its nearest rival. In fact, all the other top PC makers saw shipments decline worldwide and in the United States, according to Gartner. "Compaq continued to suffer from competition relating to its supply chain," Smulders said. "In addition to the 11 September (terror attacks), we believe the company was adversely affected by an at first uncertain reaction to the HP-Compaq merger announcement. (Hewlett-Packard) experienced its slowest growth for worldwide shipments since the first quarter of 1997. As with Compaq, HP's strong dependency on the US home market is taking a great toll on its overall performance." Market researcher IDC also released preliminary third-quarter results Wednesday. According to IDC, if the third-quarter figures for merger partners HP and Compaq were added together, they would total 5.1 million units. Thus, the combined company would have eclipsed Dell as the largest PC maker worldwide. But the merged company would also have seen its third quarter shipments decline by 29.6 percent, again using IDC's results. Gartner's figures included a breakdown of the top five PC makers. IBM was No. 3 worldwide with 6.6 percent of the market and No. 5 domestically with 6.3 percent of the market, Gartner said. HP held the No. 4 spot worldwide with 6.4 percent of the market and was No. 3 domestically with 8.8 percent of the market. NEC, which was not in the top five in the United States, was No. 5 globally with 3.4 percent of the market. Gateway was No. 4 in the US rankings, with 7.4 percent market share, but did not register on the global market and is now focused exclusively on the US market. Similar to Gartner's data, IDC's third-quarter figures showed a drop in unit shipments of 13.7 percent globally and of 21 percent in the United States. In its press release, IDC termed the third-quarter figures a "PC recession". Although US PC sales were struggling at this time a year ago, IDC analyst Roger Kay said that Europe and Asia had appeared to be weathering the storm at the time. Now, he said, "the non-US markets are in the tank". IDC said that Dell was the only major PC maker to increase its worldwide unit shipments in the quarter. According to IDC, Dell shipped 4.2 million units, up 9.3 percent from last year's third quarter. That compares with shipment declines of 31.8 percent at Compaq, 18 percent at IBM, 25.5 percent at HP and 16.2 at Fujitsu Siemens, which IDC had coming in ahead of NEC to grab the No. 5 spot worldwide. "Dell's aggressive pricing and ability to react quickly to changing market conditions allowed the market leader to further distance itself from competitors," according to IDC. IDC noted that the 13.7 percent year-over-year drop contrasts with an average increase of about 15 percent in the past several years. Looking ahead, IDC said sales will remain depressed in 2002, with unit shipments in 2003 increasing by single-digit percentage points and then by double digits in 2004, before dropping back to the single-digit growth range. News.com's Michael Kanellos contributed to this report. See the Hardware News Section for full coverage. See techTrader for the latest financial news in the high-tech sector. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum Let the editors know what you think in the Mailroom. And read other letters.