Online PC Sales Push Dell Past Compaq in U.S.

Direct computer seller Dell Computer Corp. has topped rival Compaq Computer Corp. in U.S. PC sales for the first time ever, according to data released today by both Dataquest and International Data Corp.

Both analysts attribute Dell's surge to PC sales over the Internet, which, according to IDC, generate $30 million (US$) a day. IDC added that selling PCs to consumers via the Internet has become a more effective method than selling via traditional brick-and-mortar stores.

While Dell now leads in U.S. sales, Compaq continues to hold a commanding lead in global sales, with a 13 percent share of the international market compared with Dell's 10 percent.

Dell Sells 7 Million PCs in U.S.

According to Dataquest, the Round Rock, Texas-based Dell sold 7.02 million PCs in the U.S. in 1999, snatching a 16 percent share of the U.S. market.

The Houston, Texas-based Compaq sold just 6.86 million PCs in the U.S. in 1999, giving it a 15.7 percent market share. A year earlier, Compaq commanded a 16.1 percent share.

Gateway Moves Into Third Place

Online direct seller Gateway, Inc., which also has more than 200 offline locations, came in third place in the United States. The South Dakota-based company captured 9.1 percent of the market, up from 8.4 percent in 1998.

Additionally, Hewlett-Packard's (NYSE: HPQ) share rose to 8.7 percent from 7.5 percent to clinch fourth place, while Apple (Nasdaq: AAPL) came in sixth.

IBM Loses Big

The biggest loser in 1999 was IBM (NYSE: IBM), whose sales slumped both in the U.S. and worldwide. IBM slipped to fifth place domestically in 1999, from third place in 1998. IBM remains in third place worldwide.

IBM pulled its Aptiva PC line out of brick-and-mortar stores last year because of poor sales.

Y2K Had Little Effect

Despite concerns about a Y2K-related slowdown, last year's PC sales soared by 22 percent worldwide.

The analysts contend that low computer prices, product re-designs and hefty rebates kept Y2K fears to a minimum. Additionally, heavy buying from small to medium businesses -- especially online merchants -- also offset a slowing of large corporate purchases, analysts said.