Monday, 23 April 2007

HP Widens Lead Over Dell in PC Market

HP is expanding its foothold in the PC market and Dell seems to be doing the opposite as per reports by market watchers. The shipments of HP have gone up by 28.2 per cent in the first quarter as opposed to the same period a year back. On the other hand, Dell’s shipments...

HP is expanding its foothold in the PC market and Dell seems to be doing the opposite as per reports by market watchers. The shipments of HP have gone up by 28.2 per cent in the first quarter as opposed to the same period a year back. On the other hand, Dell’s shipments have seen a decline by 6.9 per cent worldwide.

HP is gaining market share by launching low cost PCs. The move is to attract buyers who are on a shoestring budget when it comes to buying PCs.

Phil McKinney, vice president and general manager of HP's gaming business said that the new line-up would target "customers who are going up to the high end, but don't need all that customisation".

Rahul Sood, the chief technology officer for HP's gaming division, said the new initiative is aimed at customers who want a lot of performance, but who don’t need extra expensive design that comes with the other PCs.

Back in 2005, Dell had also implemented the same strategy

HP is calling their strategy the "Mercedes" strategy. McKinney said, "We're not going to go off and create a fourth brand."

The new systems will include desktops, notebooks and handhelds, and should be available by the end of 2007.Low cost PCs were hailed the next big wave in the computer industry. If computer sales have to be increased in price conscious countries like India, computer makers have to launch low cost PCs. A few Indian companies such as HCL, Xenitis, Sahara did launch low cost PCs priced at Rs. 10,000 (USD 250) two years ago but sales were lacklustre as these computers were underpowered and lacked in features.

It remains to be seen how the industry reacts to announcement by HP. If HP can pull off such a coup, then computers can indeed become mass-market products.

"They (HP) are also sort of reaping the benefit from the past two to three years of restructuring," David Daoud, an analyst at IDC said.