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Dell cuts sales gap with PC leader Hewlett

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Bloomberg News / April 17, 2008

SAN FRANCISCO - Dell Inc.'s PC shipments rose the most in almost two years in the first quarter as a new retail strategy helped narrow the gap with market leader Hewlett-Packard Co.

Dell shipped 10.9 million units, up 22 percent from a year earlier, Framingham-based research firm IDC said. HP's shipments climbed 17 percent to 13.3 million. Data released yesterday by Stamford, Conn.-based research company, Gartner Inc., showed similar gains for Round Rock, Texas-based Dell.

Michael Dell, chief executive of his namesake company, has shifted away from just selling custom-made machines directly to customers. The company now relies on 10,000 retail stores to help sell its computers, an attempt to win back customers from HP, which has led the PC market for six straight quarters.

"It's regaining some of the momentum it lost about a year ago," IDC analyst David Daoud said. "Retail is probably the biggest chunk of it."

The two rivals saw higher growth than the worldwide market, which IDC pegged at 15 percent, as the threat of a slowing US economy prompted consumers and corporations to cut spending. US shipments, which represent about a quarter of all units, rose 3.5 percent versus the 7 percent IDC had expected, Daoud said.

The US market performed in line with Gartner's expectations, rising 3 percent to 15.2 million in the first quarter. Global shipments rose 12 percent to 71.1 million.

HP had 19.1 percent of the market, while Dell had 15.7 percent, according to IDC. A year earlier, HP had 18.6 percent, and Dell had 14.8 percent.

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