Hewlett-Packard Extends Lead Over Dell in PC Market

Hewlett-Packard has topped Dell in PC sales for the second quarter in a row, securing its position as the world's biggest PC manufacturer. HP took 17.4% of the market, up from 15% last year, while Dell was down to 13.9% from 16.4%. Dell and HP both shipped 38 million units, but HP's shipments were up 19.2% in 2006 while Dell's were up a scant 3.5%. HP upped unit sales by 23.9% in Q4, in part due to its vast retailer network, which includes Wal-Mart. Dell's quarterly sales, on the other hand, skidded an alarming 8.7%. Overall, PC sales are declining: total shipments rose 7.4% in Q4 to 67.4 million versus 16% in Q4 2005. PC sales in the U.S. were constrained by new electronic offerings like widescreen TVs and gaming consoles, as well as by the delayed release of Microsoft's Vista OS. Dell in particular was hurt by contracting demand for business PCs, an SEC probe, a battery recall, and persistent customer complaints. The U.S. market -- in which Dell managed to retain top position -- slid 3.2% to 16 million units in Q4.

• Sources: Bloomberg, Channel Register
• Related commentary: The Decline of the PC: Computers No Longer a Growth Industry, Dell Losing Market Share, Hewlett-Packard Maintaining, How Hewlett-Packard Got Its Groove Back, Hewlett-Packard Has Big Plans, Understanding HP's Changing Profit Margins
• Potentially impacted stocks and ETFs: Hewlett-Packard Co. (HPQ). Competitors: Dell Inc. (DELL), International Business Machines Corp. (IBM), Gateway Inc. (GTW), Apple Inc. (AAPL), Lenovo Group Ltd. (LNVGY), Toshiba Corp. (TOSBF). ETFs: Internet Architecture HOLDRs (IAH), iShares Dow Jones US Technology (IYW), PowerShares Dyn Hardware&Con Electronics (PHW), iShares Goldman Sachs Technology Indx (IGM)

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