Worldwide PC Unit Sales Up 13%, With Hewlett-Packard Gaining Share and Dell, Apple Losing (HPQ, AAPL, DELL, GTW)

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Includes: AAPL, DELL, GTW, HPQ
by: Andy Neff

Preliminary estimates from IDC and Gartner indicate that worldwide PC shipments rose about 13% year/year, with a trend of Hewlett-Packard (NYSE:HPQ) gaining share, Dell Inc. (DELL) and Apple Computer Inc. (NASDAQ:AAPL) losing share, and Gateway (GTW) gaining marginal share (albeit on questionable data). IDC placed Dell’s market share at 18.1% (down from 18.6% a year ago) on approximately 10% shipment growth. IDC and Gartner both put No. 2 Hewlett-Packard Co.’s growth at about 22% -- IDC said HPQ's market share was 16.4%, followed by 6.4% for Lenovo (which recently took over IBM's PC business).

In a note to clients, Bear Stearns analysts Andrew J. Neff, Bill Hand, and Ted Chung responded:

HPQ appears to have benefited from strength in consumers and its efforts to enhance its channel partner relationships. On the other hand, DELL appears to have focused on profitability at the expense of volume. AAPL also lost share to 2.1%, growing units 4% based on just-released financials, but that number reflects product transitions to the MacTel product line.

Globally, growth was distributed unevenly, with softer corporate market demand leading to a below-market growth rate of 7 percent in the US, while European PC shipments increased, in line with market growth, by 13% year/year, and Asia/Pacific continued to thrive with PC shipments increasing 20% year/year.

In light of some ambiguity surrounding Gateway's predicted increase (both IDC and Gartner used numbers for GTW that seem too high, which could mean a downward revision following Gateway's quarterly report), the analysts took a closer look at Gateway's performance in the US market:

US trend: GTW regains share in the US -- needs clarification. Particularly in the US, while HPQ saw its market share increase by 180 bps to 20% with PC shipments growing at 16%, Dell’s share declined by 160 bps to 32.3% with flat year/year unit growth.

In addition, according to these firms, GTW saw sharp increase in share (up 231 bps year/year to 8%) with units increasing by 48% year/year (although GTW numbers are based on forecasts, which are subject to revision when it reports -- we are forecasting 10% unit growth worldwide). Regarding GTW's numbers, it's not clear to us where IDC/Gartner got domestic units of 1.23mm, which implies a 7% sequential increase compared to an 11% unit decline for the market -- we have 1.035mm for total worldwide units, but GTW did not give any guidance so this number is subject to revision.