Dell Boosts PC Market Share in U.S.

SAN FRANCISCO -- Dell's (DELL) move to retail shelves may be paying off --at least in the U.S.

According to the latest data from industry research firm Gartner, Dell grabbed nearly a third of the PC market share in the U.S. during the first quarter. The Round Rock, Texas, PC maker boosted shipments 15.7% year-on-year to nab 31.4% of the U.S. market. A year earlier, Dell had only 27.9% of the market. Hewlett-Packard (HPQ), by contrast, posted its weakest U.S. performance since the merger with Compaq in 2003, Gartner said, as shipments declined 0.2%. H-P's U.S. market share slipped from 25.8% to 25% during the quarter.

H-P remains the world's top PC maker, with 18.3% of the global market vs. Dell's 14.9%.

The results are an important sign of improvement for Dell, which has taken various steps to revive its fortunes in recent months, such as moving away from its model of selling PCs strictly by phone and Internet orders. Since founder Michael Dell return to the helm, Dell has struck deals with retailers like Wal-Mart (WMT), and Best Buy (BBY).

Dell said last month that it will take another year before it can sell PCs through retailers as profitably as the competition. But the latest figures suggest that at the very least Dell has found a way to reignite demand for its brand in the U.S.

Overall, PC shipments in the first quarter increased 12.3% compared with the first quarter of 2007, according to Gartner, despite fears that souring economic conditions might pinch PC sales.

"Home mobile PC growth continued to drive U.S. PC growth," said Gartner analyst Mika Kitagawa. "Despite declining consumer confidence, U.S. consumers did not put off mobile PC purchases as evidenced by solid mobile growth during the first quarter."

That sales growth was stimulated in party by aggressive price cuts, Kitagawa added.

Strong demand for laptop PCs resulted in strong than expected growth in the Europe, Middle East and Africa region as well as in the Asia Pacific region.

The report of healthy PC sales come a day after PC microprocessor maker Intel (INTC), delivered strong quarterly financial results, and stressed that it was not feeling any ill-effects from the slowing U.S. economy.

Shares of Dell were up 29 cents at $19.01 in extended trading on Wednesday. H-P shares were up 65 cents at $47.75.