PC Vendor Bender

Crap year all round for Top Five

The year 2000 will not be remembered as a golden year for the PC industry. Manufacturers struggled to get over Y2K order slumps at the start of the year, only to be greeted at the end of it with another sales slowdown - in the quarter when they expected to do the briskest business.

In 1999 PC shipments grew 23.3 per cent, but by the second quarter of 2000 sales were lagging behind forecasts, with the US giving out early warning signs of especially sluggish growth - IDC put the figure at 7.2 per cent. By December Dataquest was considering cutting its forecast for growth in the US consumer PC market in 2001 to 12 per cent from 16 per cent.

And so to the vendors....


Big Q kicked off the year by buying Inacom's PC assembly facilities for $370 million, and started touting its blue breadbin-style Internet-ready Presarios. In Q1 the US vendor managed to sell a million more PCs worldwide than Dell, IDC reported, although its sales only grew one per cent to $9.5 billion in the same quarter.

In April, e-shoppers flocked to the Compaq UK Website after a cock-up put PCs on sale for £1. Compaq didn't honour the 'offer'.

Compaq finally unleashed its AlphaServer GS series, codename Wildfire, mid-year, and nabbed itself a new UK MD in the shape of Rene Schuster after promoting former Gateshead dustman and Compaq UK MD Joe McNally to chairman for the region.

In August it ran out of iPaqs, then decided to ditch its ProSignia range of PCs.

Compaq chairman Ben Rosen was replaced by Michael Capellas. Later in the year, as the PC sales slump and general doom and gloom set in, Compaq got hit with a lawsuit over patent infringement (concerning the compression of video data) from seven companies demanding at least $60 million in damages. In December it joined the rest of the IT industry and issued a profit warning, saying sales were likely to be around ten per cent lower than expected.

Compaq buys Inacom's PC operations
Compaq flogs blue breadbins to the masses
Compaq runs out of iPaqs
Compaq joins profit warning parade
Compaq's Rosen steps down


After seeing its profits dented by Intel shortages the previous year, the direct-PC demon got its knickers in a twist over domain names and announced it was suing 23 people for alleged cybersquatting. Dell demanded the 17 companies and six individuals turn over URLs such as Dellbackup.com, Dellsolutions.com and Dellparts.com.

IDC named the Texan vendor number one in the global computer market for the previous year's Q4, outselling rival Compaq in both desktops and notebooks.

In June there was a bit of a ding-dong when it turned out that thousands of Dell customers were still waiting for their Windows 2000 upgrade for the company's NT workstations. When Michael Dell took The Reg out for lunch in London later that month he blamed "irresponsible" component makers for driver delays.

The next month it ditched its WebPC, just seven months after the low-cost home Internet machine was released onto the consumer market. It also announced a $5 billion deal with Japan's Toshiba to source parts for three years.

In September it showed off a prototype of its Itanium workstation, then chopped prices on servers, PCs and notebooks. It blamed Europeans for a global sales shortfall in Q3, but managed to hit revised estimates for the quarter. It also had to recall a batch of notebook batteries that were seen as a fire risk - 27,000 of them sold between June and October.

Dell's site was voted one of the worst in cyberspace in a survey of the top 25 shopping sites in the UK, while it was hit by a lawsuit from unhappy Tulip over an alleged $17 billion patent infringement.

In the midst of the sales slowdown, delays over PC and notebook shipments caused a headache for Dell's Christmas punters, while it chopped up to 20 per cent off notebook prices just before Yule in attract sales.

Dell shoots WebPC
Dell chops US laptop prices
Dell hit by Christmas shipment delays
Dell and Dixons give dire e-service


Big Blue started the year by adding extra models to its ThinkPad range of notebooks, and thrust a 75GB hard drive onto the market - the Deckstar 75GXP, aimed at the desktop market.

Company head Lou Gerstner made it into the Forbes rich-list for US execs - his pay package was worth a comfortable $107.2 million. In June IBM said it would finally get round to offering Linux on ThinkPads - using Caldera OpenLinux 2.4, and it also unleashed a one-gig Microdrive.

In July IBM agreed to pay Time Computers £13 million after a dispute over alleged faulty components supplied to the UK outfit. IBM also started cost cutting to try and turn its PC business around, while touting its first wireless ThinkPads.

The company went a bit mad around the time of the Sydney Olympics, taping over any non-IBM logo to pass through the event's gates in an effort to get the most for its sponsorship money.

It Autumn it started splashing more cash around, announcing it would spend $65 million to invest in European Web consulting companies, and $2.5 billion to build a chip plant in New York.

An IBM exec in the UK was accused of insider trading, and the company rounded off the year by agreeing to supply the biggest computer in the commercial world to date. The machine will be used to look into genetic code.

$10m super'puter to crunch genetic code
IBM exec accused of insider trading
IBM builds $2.5 billion chip plant in New York
IBM's Olympic brand madness

Hewlett Packard

The company revealed it would start using AMD Athlon chips in its PCs. It annoyed customers with a lack of Win2K drivers for its OfficeJet scanner/fax/printer devices - a situation which dragged on and on, and then separately got sued over patent infringement in printer technology.

Its Q3 figures saw a 33 per cent rise in profits, and HP claimed to be the world's fastest growing PC vendor.

In September it started talking about buying PriceWaterhouseCoopers' consulting business. It was thinking of paying around $18 million for the unit, but later canned the idea.

Carly Fiorina came to New York in the same month to launch the company's monster SuperDome server - the HP CEO and president was later also given the title of HP chairperson.

Amid the US PC sales slump, HP warned its own business had been hit, but said it still expected to meet earnings estimates. It started cost-cutting in December, but was one of the few IT companies not to issue a profit warning in the latter part of the year. ®

Sun and HP launch cost-cutting programs
HP 'world's fastest growing PC vendor'
HP says US sales worse than expected
HP wants to spank you with its SuperDome
HP 'world's fastest growing PC vendor


In January Gateway said profits fell five per cent for Q4 1999. Later in the year it launched a Net appliance along the lines of 3Com's Audrey called the Connected Touch Pad.

It too fell foul to slowing PC sales, and issued a profit warning in November - primarily blaming disappointing sales over the Thanksgiving weekend. Towards the end of the year it was so desperate to shift stock it started filling its showrooms with PCs instead of its usual practice of taking orders then shipping them out. ®

Gateway turns showrooms into PC supermarkets
Gateway in PC price war gloom

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