Dell computer dealer

Dell Computer Corp. has pulled ahead of Compaq Computer Corp. as the number one vendor in the U.S. in terms of units shipped, according to estimates released by International Data Corp. (IDC), but Compaq remains the world's leading vendor.

Worldwide PC shipments by all companies rose to 27.9 million units in the third quarter of 1999, up 7.1 per cent from the previous quarter and up 25 per cent from the same time last year. The largest growth was in the Asia/Pacific region (excluding Japan), where the number of units shipped increased by 38 per cent over last year.

However, what's interesting is not how many computers are being shipped, but who's shipping them. Dell, for instance, shipped 2.12 million units in the United States, while Compaq, formerly the market leader, shipped only 1.87 million. Despite this setback, Compaq held on to its position as worldwide market leader.

"It comes down to product, there's no doubt about that," says Ralph Hyatt, vice-president of commercial products with Compaq Canada Corp. "The underlying assumption in every situation is that the person who has the best product portfolio, that is most current, is most innovative and is providing the best value to the customer would be the one who ends up leading the marketplace. It's a position that we've held for a number of years, and one that we expect to maintain."

Hyatt says he believes that Dell's astonishing shipment growth (58 per cent in the U.S. over the last year) can be attributed, in a large part, to their business model.

"We've seen Dell grow very successfully," he says. "They sell their product directly and they have a strong presence on the Internet, and so they're very good for the customers who want to do business that way. They have a very good model for that, and they do it very successfully."

So can we expect to see Compaq migrating towards a similar distribution model in an attempt to boost its own U.S. shipment growth rate which, at 24 per cent, is less than half of Dell's? "Selectively, we do intend to provide customers with the ability to buy products from us directly, partly facilitated by the Web," says Hyatt, "but Compaq Canada remains a partnering company and a channel-led company.

And while we'll provide that option, certainly, the vast majority of our business will continue to be done with partners because of the advantages to us of having that partner focus. We have 3,000 resellers across the country who represent us in every market, who provide service and support for our product, and that's a leverage model which Dell doesn't enjoy."