US Report: PC market grows by almost 20 percent

The stock market may not be what it once was, and Windows NT 5.0 may still be years off, but the PC market is humming along nicely in the third quarter, with U.S. growth near 20 percent, according to new reports from analysis firms.
Written by Margaret Kane, Contributor

And the strong U.S. growth, combined with strong sales in Europe, was enough to offset slumping markets in Asia, according to studies from International Data Corp. and Dataquest. Dataquest pegged the U.S. growth rate at 18.2 percent, led off by direct sellers Dell Computer Corp. (Nasdaq:DELL) and Gateway Inc. (Nasdaq:GATE). Dell came in second in the U.S. market, with unit shipments rising 56.3 percent, while Gateway, at fifth, saw a 44.1 percent increase, according to Dataquest. IDC had a lower figure -- 14 percent -- for overall US growth rate. The third quarter is traditionally Gateway's strongest, said IDC analyst Christine Arrington, because of the company's focus on consumer sales.

Consumer sales also helped propel IBM (NYSE:IBM) back into the top five in the U.S. market, she said. IBM came in third in IDC's report, with 9.1 percent of the market and a 34 percent rise in unit shipments. "They have a low cost solution at the right time in the market. In the third quarter of last year, they didn't have a low cost solution. This year it's an option," she said. Strong consumer sales also helped the number four player, Hewlett-Packard Co. (NYSE:HWP), which grabbed 8.4 percent of the U.S. market, according to IDC.

But all those home PCs sales didn't help Compaq Computer Corp. (NYSE:CPQ), although the company held onto its number one spot at home and abroad, despite an eight percent drop in U.S. growth. Compaq has suffered with channel issues in recent quarters, and is still struggling to integrate Digital Equipment Corp. into the company since the merger earlier this year. But Compaq's problems are just about over, and its international sales -- up 9.7 percent according to Dataquest -- remain strong. "Compaq's challenge with channel inventory strategies has been confined to the United States," Dataquest said in a release.

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