Hewlett-Packard ( HPQ) strengthened its grip on the PC market in the fourth quarter, as rival Dell's ( DELL) shipments continued to freefall. According to industry research firm Gartner, H-P shipped 11.6 million PCs worldwide in the fourth quarter of 2006, up 23.9% from the same time a year ago. By contrast, Dell's worldwide shipments declined 8.7%. The two companies' divergent sales performance widened H-P lead as the world's No.1 PC maker, with 17.4% market share, vs. 13.9% for Dell. At the end of the third quarter, when H-P first grabbed the top spot, its market share was only 16.3% vs. 16.1% for Dell. Dell, which has been plagued by a variety of problems including executive defections and eroding profit margins, was particularly hurt by U.S. sales, where its shipments plummeted 17.3% in the fourth quarter. Gartner analyst Mikako Kitigawa called Dell's accelerated shipment decline surprising. "Dell's market share was its lowest in four years. It lost market share across all segments in the U.S., particularly the home market," Kitigawa said in a statement. The biggest gainer in the U.S. PC market was Apple ( AAPL), which increased shipments 30.6% in the quarter to grab a 5.1% share of the market. The U.S. was a land of little opportunity for PC makers in 2006, with shipments increasing a scant 1.2% from 2005. By contrast, shipments in the Asia/Pacific region increased 17.2% during 2006 and the Europe, Middle East and Africa region saw PC shipments rise 10.8%.
Shares of Dell slipped 0.9%, or 22 cents, at $25.62 in extended trading. H-P shares were off 9 cents, at $41.40 in extended trading.