Hardware: Dell And HP Down, IBM And Lenovo Up

In the CRN third quarter 2006 sales expectation research report, both Dell and Hewlett-Packard saw significant declines in their PC hardware market position in the second quarter compared to the first quarter.

The percentage of solution providers citing these vendors' products as their best selling desktop, notebook, PC server and RISC server all declined, in some cases significantly, as Chart 8 shows.

In contrast, Lenovo saw a significant strengthening in its position in the small and midsize company markets for desktops and notebooks. In both categories, the best-selling percentages were also higher compared to year-earlier levels.

Even so, Lenovo continues to lag well behind market leaders Dell and HP, though it continues to rank ahead of custom systems in the notebook PC arena.

The results for IBM were also positive. The vendor gained share in the PC server market, and managed to hold on to most of the huge jump in best selling RISC server percentage it achieved in Q1 of this year.

Custom systems also showed strength in the second quarter, reversing some of the losses that took place in the first quarter in areas such as desktops and PC servers.

The gains were limited, however, by the fact that component shortages increased significantly in the second quarter in many key areas, including motherboards and memory. In addition, the RISC server market appears to be consolidating around the three major vendors—IBM, Sun, and HP—with custom systems playing only a peripheral role.

Overshadowing these trends is the impact of the delay in the release of Microsoft Vista. With the operating system now set for general release in January 2007, some brokerage firms and technology research houses have sharply cut their forecasts for PC unit sales growth for 2006.

Lehman Brothers, for example, recently lowered their forecast of unit sales growth to 9.8 percent vs. their earlier forecast of 12.4 percent. Industry researcher Gartner expects PC sales to grow 10.6 percent this year, compared to 15.5 percent in 2005. The downward revisions extend to notebooks as well as desktops.

*To read the full CRN 3Q Channel Business Report, click here.