Forecasting the PC Market's Future: The Rise of HP, The Fall of Dell

Tracking the fall from grace of one company in comparison to the ascendance of its arch rival is one of the things we do best.

For more than a year now, our surveys have been telling the tale of Dell's (DELL) woes, while simultaneously tracking the rising fortunes of Hewlett-Packard (HPQ).

On March 1, Dell announced its fourth-quarter results, and the news was not upbeat. Stung by a sharp drop in fourth-quarter profits, the computer maker warned Wall Street that its future would likely show declining sales due to competitive pressures.

Hewlett-Packard's most recent quarterly results were the polar opposite: strong earnings growth of 26% and revenue growth of 11%.

Let’s take a close-up look at our latest survey results:

Dell's Corporate Slide

In the Alliance's February corporate PC purchasing survey, Dell's market share for planned purchases of desktops and laptops continued to erode -- hitting new all-time lows for a ChangeWave corporate purchasing survey.

Bottom Line: Since August 2005, Dell's desktop market share among planned corporate buyers shows a drop of 10 percentage points, and its laptop market share showed a drop of six percentage points.

In contrast, dating back to August 2005, HP's (HPQ) share among planned corporate buyers of desktops was up four points and laptops up five points. The following chart shows HP's upward momentum.

Dell has Consumer Woes as Well

The story is similar on the consumer side of the PC purchasing coin.

Our January 2007 consumer spending results highlighted Dell's continuing troubles, as the company fell to record lows among consumer PC buyers of laptops and desktops. The following chart shows the gory details.

The same survey showed that HP's desktop and laptop share continued to slowly improve among consumers -- more solid evidence of the positive trend for HP.

The main conclusion to be drawn here is that when it comes to getting a handle on the PC market, we truly "get it." And as you can see from this stock chart comparison, HP's rise and Dell's fall have played out exactly as we predicted:

One-Year Stock Chart Comparison -- DELL vs. HPQ

Our goal has always been to gather real-world market intelligence well before the hordes on Wall Street. By going directly to the source -- i.e., by surveying the men and women on the frontlines of the consumer and corporate battlegrounds -- we are among the first to know what's on the horizon for a given company or sector.

Stay tuned. Our newest consumer PC survey is just wrapping up, and we'll continue to discover the very latest on who has momentum and who doesn't in the PC market, well ahead of the Street.

Jim Woods co-wrote this article.
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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

Comments

[Julian Ivan...:]

Great points, but the author is forgetting the wild card in the consumer space: AAPL, which has more than doubled its market share of notebook sales in just 10 months, and is seeing unit sales growth of 3-4x the industry average.
Apple will eat DELL's lunch - and HP's - in the consumer space. Just look at new university entrants: many are reporting that up to 65% of new students are bringing Macs with them. Over the years, that translates to a massive growth in market share as those people will upgrade to new Macs, not PCs, and they'll be more inclined to use Macs in their workplace, and eventually with their families.
The tipping point has been reached, and the days of the bland PC+Windows dominance are over. The future of the consumer desktop, and (and laptop!) belongs to Apple.

2007 Mar 28 08:39 AM