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Sales Numbers Show PC Recovery Still Distant

Dell takes back No. 1 spot in PCs, but shipments for 2002 grew only 2.1%.

Dell's

(DELL) - Get Report

back in the lead as the top global vendor of PCs, based on first-quarter unit shipments. The company gained the title in the third quarter of 2002, only to briefly cede it to

Hewlett-Packard

(HPQ) - Get Report

again in the holiday season, when H-P was helped by its relatively higher proportion of sales to consumers.

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Now H-P's fallen into second place again, with 15.8% of the world market to Dell's 17.3%, according to market research outfit IDC.

The group said worldwide PC shipments edged up only 2.1% in the first quarter from the prior year, in line with expectations. Sales were even slower in the U.S., where they grew 1.5% in the period, helped along by increasing adoption of mobile PCs.

"While results were close to forecast, consumer spending was relatively weak, and we have yet to see a significant rise in commercial activity," said Loren Loverde, director of IDC's quarterly PC Tracker. "A slow economy and talk of war reduced demand in the first quarter, but many expected to get back to business soon. Now, people are starting to realize that military victory in Iraq still leaves questions about global security and economic recovery, and it may be a while before growth picks up."

At Gartner, vice president Charles Smulders said aggressive price cutting was key to maintaining PC shipment growth in the quarter -- hardly a consoling thought for investors in boxmakers.

In another sign that recovery remains elusive for techland, a trade group reported late Thursday that March orders for semiconductor manufacturing equipment remained 2% below the levels of March 2002, though they grew 8% from the prior month. The bookings figure reflects a rolling three-month average.

The March book-to-bill ratio for chip equipment stayed virtually flat with the prior month, at 0.99, according to Semiconductor Equipment and Materials International (SEMI). That means only $99 worth of new orders were received for every $100 of product billed for the month.