Ed Moltzen
The Chart
June 11, 2008
Dell's New Formula Shows Signs of Paying Off
Flashback: it's August of 2006. Dell is a direct-only company, it's suffering from the bad publicity of having one of its notebooks blow up at a conference in Japan, and it's on the brink of one of the (notebook battery packs) in technology history. Its market share was on the verge of a big decline and as companies including Hewlett-Packard and Acer were taking away business.
Specifically, Dell found itself losing signficant share in notebooks - - the hottest growth area in the industry.
After a senior-management shakeup, a turn to reseller and retail channels to grow sales, and a new emphasis on quality control and innovation, guess what?
According to research firm Displaysearch, Dell grew its worldwide notebook market share last quarter to 15.1 percent, it climbed over Acer to regain the Number 2 position (behind HP), and it grew its worldwide notebook shipments 45 percent on a year-over-year basis. Dell grew its notebook sales at a stronger clip than anyone else besides Lenovo. (Lenovo grew notebook sales 58 percent, year-over-year, and owned half the market share of Dell.)
Dell's lousy performance in notebooks in 2006 provided the first glimpse into something going wrong at the Round Rock, Texas-based company. Now, six months after launching its first, formal, broad-based channel program and working to innovate its notebook lineup, this may very well be the first glimpse into something going right there.
Displaysearch does note that Acer could just as easily turn up the heat, get aggressive, and take back the Number 2 spot in the near-term. But in an increasingly competitive slice of the market, Dell at least has some channel partners now that it can take into battle.
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