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Big PC players increase market pressure

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Dataquest

Marc Ambasna Jones ZDNet.co.uk

Published: 01 Aug 1997 11:38 BST

Tier two and three PC vendors are under most threat despite worldwide PC shipments growing by 17 per cent during Q2. Compaq, IBM, Hewlett-Packard and Dell have all shown strong growth at the expense of smaller vendors who are coming under increasing price and marketing pressure from the top tier PC makers, according to Dataquest. Early casualties in the top end include Olivetti and Apple. Apple has fallen to ninth in the market share rankings while Olivetti has continued to struggle since its restructure.

Compaq has extended its market lead adding 2.1 per cent market share in the second quarter of this year. It now has 11.7 per cent of the worldwide market showing a 42 per cent growth over Q2 last year. Dell has shown the largest growth (61.4 per cent) and now commands 5.3 per cent of the market in fourth place. IBM is still in second with 8.8 per cent on 20 per cent growth while HP is in third with 5.5 per cent on growth of 58.4 per cent.

"If the top tier continues its torrid growth relative to the PC market, consolidation will occur," said Scott Miller, senior industry analyst in Dataquest's computer systems and peripherals programme. "Consolidation on this scale has the power to shift the balance of power in the PC industry."

Dataquest is also projecting that the worldwide PC market will reach over 151 million units by 2001. For 1997, the company is expecting a 19 per cent growth to shipments of 84.3 million units. "The PC war between Dell and the other vendors will change the industry landscape forever, said Bill Schaub, Dataquest's computer group director. "Everyone dependent on the PC industry needs to navigate this new terrain very carefully."