Third Quarter PC Numbers: Education, Innovation and HP

Both Gartner Group and IDC posted reports Wednesday night that showed brisker growth in PCs than any time in the last few years, with Hewlett-Packard a market share winner and suggestions that Acer's hot growth may be cooling off.

HP, Palo Alto, Calif., remained the worldwide PC market share leader, according to both Gartner and IDC, while Dell remained the PC market share leader in the U.S. -- even though it saw its numbers slipping compared to a year ago.

Interviews with value-added resellers and distributors point to a number of factors driving growth and change in the market:

- A stronger-than typical education sales cycle, spurred by a build-out of schools reaching to put more PCs into the hands of more students and teachers;

- Key improvements in technology from component providers Intel, Advanced Micro Devices and Seagate, which have dramatically improved performance and cut costs;

- Continued actions by HP to take advantage of rival Dell's two years of missteps in PCs;

- The sudden appearance that Acer, after 18 months of hyper growth, may be seeing its U.S. sales plateau as HP and others match its price-aggressiveness.

IDC said it measured PC shipment growth in the third calendar quarter of the year at 15.5 percent, while Gartner said it measured growth at 14.4 percent. Combined with bullish remarks by Intel and Seagate this week in their quarterly earnings reports, a picture is beginning to emerge of a market that is simply happy to take advantage of sweeping improvements in IT performance, pricing and functionality.

Jeffrey Menold, owner of Clarion Computer, a Clarion, Penn.-based system builder and solution provider, said the current rate and pace of technology improvements -- as well as a continuing desktop upgrade cycle " led to customer interest in upgrades.

"I anticipate steadily growing, because of the ever-growing upgrade cycle," Menold said. "It's been about four years since the last big changes."

The full PC sales picture may not be clear for several more weeks. Ingram Micro, for example, reports its quarterly earnings next week and Tech Data's quarter doesn't end until Oct. 31. Tech Data has guided financial analysts to expect low, double-digit growth in the Americas during the current quarter.

As individual PC makers line up, though, HP's winning streak continues, according to Gartner, IDC and a number of solution providers.

"HP has taken a lot of business from Dell; Dell has had some slipups in the past," said Dan Hogan, vice president and chief operating officer of DSR Inc., an Elkridge, Maryland-based solution provider. "(HP's) prices are extremely competitive, and they've got a nice product line for each of the different segments. They've got a good ultra-portable, good business machine. And there aren't any supply issues."

Helping matters was a stronger education sales season, Hogan said. "More and more, schools go into one-to-one computing," Hogan said.

Outside of some government accounts, Hogan said he hasn't noticed Acer's presence as much of a factor as some of the market share numbers might indicate.

Gartner and IDC both reported that notebook shipments continued to be brisker than desktop PC shipments, a trend that matched what solution providers continued to seel.

"We had a really good month last month," said Paul Zoz, president of Bizco, a Lincoln, Neb.-based solution provider. "All of our growth has been in the Panasonic mobile market." Zoz said he has noticed vertical markets, including workforce automation and sales automation, have been stronger than others.