Dell Gains on Increasing PC Market Share
Investors are looking bullishly at Dell (NASDAQ:DELL) stock this morning, sending prices up 1.72% on news that the computer maker has increased its market share in the PC segment. Dell’s shares of global personal computer sales rose by 2.8%, increasing its competitiveness with current leader Hewlett-Packard (NYSE:HPQ) which gained 3% in its own sales in this year’s second quarter. Overall, PC shipments worldwide edged up 2.3% in the quarter, though this mark fell well below earlier estimates by technology data firm Gartner (NYSE:IT), which called for 6.7% growth.
Hewlett-Packard remains the leader in PC market share, accounting for 17.4% of total sales compared to number two Dell, which accounted for 12.3% of global sales. Data from eweek.com signals that the PC market, despite last quarter’s gains, continues to contract on an annual basis, “HP, Dell and Apple held the top three spots, followed by Toshiba and Acer Group. Of the five, only Apple (NASDAQ:AAPL) and Toshiba posted gains compared with 2Q10, with a 14.7 percent and 3.7 percent boost, respectively. HP shipments declined slightly to 0.6 percent compared with the same period last year, while Dell dropped 10.2 percent. Acer Group posted a 25.4 percent decline.”
Analyst Rajani Singh sheds more light on the drop in YoY PC sales, “The U.S. PC market continued to contract in 2Q11, largely as a result of three factors. The first is an ongoing contraction in the netbook market and related inventories. The second is the impact of 2Q10’s difficult-to-sustain 12 percent growth. And third, demand has softened as corporate buyers continue to focus on increasing share of their IT budget in new IT solutions such as cloud and virtualization, and consumer interest shifts to media tablets.”
Despite sales that have been drained by growth in novel IT sectors such as cloud computing, tablets, and enterprise software, analysts say that professional PC sales will continue to bolster global sales as companies enter a “refreshment period” in which they will look to upgrade old computers.