PC-sales in the US in 2004, they were up!

PC sales in the US were up about ten percent in 2004, according to preliminary figures from two different research firms. Dell was the leading vendor, slightly improving the market position it had in 2003. The other major vendors were HP, Gateway, IBM, and Apple.
IDC estimated that PC sales in the U.S. were up 10.5 percent, for a total of 58.3 million units. Differing slightly because of different polling methods were the figures from Gartner, which estimated that sales were up 8.3 percent and amounted to 62.3 million units.
Both IDC and Gartner said that Dell led the pack, but again the numbers different slightly. According to IDC, Dell's sales rose 18 percent, from 16.3 million units in 2003 to 19.3 million in 2004. This increase lifted Dell's share of the market from 31 percent to 33.1 percent. According to Gartner, Dell's sales rose 18.4 percent, from 16.9 million to 18.9 million, lifting its market share from 27.7 percent to 30.3 percent.
As for HP, IDC said its sales rose seven percent, reaching 11.6 million in 2004. This rate was less than that of the market as a whole, therefore its market share fell slightly, from 20.6 percent to 19.9 percent. Gartner also showed a seven percent increase for HP's sales, with HP sales reaching 11.4 million, and HP's market share drifting from 18.6 percent down to 18.4 percent.

IBM/Lenovo, Gateway/eMAchines
Third is Gateway, forming a special case, since it merged with eMachines in the second quarter of 2004. Both IDC and Gartner counted them as a single unit, and the results were not encouraging, showing a fall in total sales. IDC figures indicate that Gateway/eMachines saw a decline in sales of five-tenths to one percent, to 3.6 million machines, with its market share falling from 6.9 percent to 6.2 percent. Gartner figured that the decline was six-tenths of one percent, if you do care.
IBM was vendor number four for 2004, and ended the year by selling its PC business to Chinese Lenovo. That move seems a little alarmist when you see that its PC sales actually increased in 2004. IDC said that IBM's PC sales went up by 6.8 percent, reaching 2.9 million units. But since its growth rate was less than that of the overall market, its market share fell from 5.2 percent to 5 percent. The Gartner figures show that IBM's PC sales rose 6.6 percent, reaching 2.9 million, but that its market share stayed the same at 4.7 percent.
Of course, IBM has better things to do than sell inexpensive PCs at low profit margins to people who ought to be buying mainframes.

Dell: the big story
Apple did okay during 2004, if you accept the fact that a market share of about three percent represents its natural place in the universe. According to IDC, its US sales rose an impressive 15.6 percent, reaching 1.9 million-but that only increased its market share from 3.2 percent to 3.3 percent. Gartner figured out that Apple's sales rose 16.1 percent, lifting its market share from 2.9 percent to 3.2 percent.
The big story would appear to be the continued dominance of the American market by Dell. Its sales were about 60 percent more than that of number-two HP, six times more than Gateway and IBM, and ten times more than Apple. Apparently the direct-sales model they pioneered continues to work.
Most of its sales are bulk sales to businesses. At Dell, a PC is not made until it is ordered, and then it is sent directly to the customer. No PC is made and then shipped to the retail channel in the hopes that someone will buy it, but, meanwhile it is sitting on a shelf growing obsolescent. Components are not bought until they are used to build a machine, and Dell often gets paid by the end buyer before it gets around to paying for the components - a significant financial advantage.
Dell continues to pose a threat to those vendors who are wedded to the retail channel. But, on the other hand, another year has gone by during which Dell failed to bury the competition with its advantages.
Evidently there will always be buyers for whom the retail channel makes sense, and there is nothing Dell can do about it. The question is: how many such buyers are there? And how to attract them?

Lamont Wood