H-P Closes Dell's U.S. Lead in PCs - TheStreet

H-P Closes Dell's U.S. Lead in PCs

It grew shipments by 26% in the first quarter.
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Having displaced

Dell

(DELL) - Get Report

as the No.1 PC maker on the global stage,

Hewlett-Packard

(HPQ) - Get Report

is now within striking distance of Dell's U.S. stronghold.

According to a report from industry research firm Garter, H-P grew its PC shipments in this country by 26% in the first quarter. That was enough to boost H-P's share of the U.S. PC market to 25.7% vs. 21% a year ago.

By contrast, Dell saw its U.S. market share slip to 27.9% from 33.9% a year earlier, as it experienced negative growth of 15.5%.

"H-P was helped by the Vista operating system consumer launch in the mature regions, and it is benefiting from a strong position in the channel," said Gartner analyst Mikako Kitagawa.

"The first quarter of 2007 was a transitional quarter for Dell as the company began a major restructuring project," Kitagawa said.

Dell lost its crown as the world's No.1 PC maker to H-P last year, as sales stalled and customer service problems plagued the company. In January, founder Michael Dell

returned to the CEO job in hopes of reviving the company's fortunes.

Dell has recruited several outsiders to help turn the PC maker around, but Gartner's latest report underscores the tough job facing the company.

Gartner said the U.S. PC market grew 2.9% in the first quarter, ahead of its projection of 0.6% growth, due to a temporary spike in demand following the release of

Microsoft's

(MSFT) - Get Report

Vista operating system. Vista adoption was primarily in the consumer and very small business segments of mature markets like the U.S., Gartner said.

Overall, worldwide PC sales increased 8.9% to 62.7 million units in the first quarter.

Taiwan's

Acer

had the best performance of any PC company, as its shipments surged 46.1% year over year, making it the world's third-largest PC vendor.

Lenovo

, which lost the No.3 spot to Acer, nonetheless experienced solid growth of 16% in the first quarter. That represented Lenovo's highest growth since its 2005 acquisition of

IBM's

(IBM) - Get Report

PC division.