Compaq and Hewlett-Packard lost market share as both were affected by inventory overhang issues. Gateway also lost market share and will pursue a more aggressive pricing strategy as it refocuses on selling hardware profitably, rather than services along with hardware. While economic factors were a major influence on the U.S. PC market, inventory overhang from the fourth quarter of 2000 was also an issue. Shipments during the first quarter of 2001 were suppressed as vendors worked to sell off existing inventory before shipping new products. Most PC vendors recognize saturation but prefer not to greatly alter well-tested product and marketing formulas.
International expansion is considered by most to be a strong enough remedy.
From June 2000 and February 2001, Harte-Hanks surveyed more than 115,000 U.S. and Canadian business sites. Plans to buy PCs in these firms are up 29 percent since the end of the fourth quarter, while server-buying plans have risen more than 50 percent during the same period. Universities and hospitals are also reporting increases in their server-buying intentions, each totaling more than 10 percent. Purchasing intentions fell off sharply during the first two months of 2001 after a December increase typical of previous years. Sites with PC purchase intentions fell 39 percent between December 2000 and February 2001, and 30 percent from what was reported in July 2000, at the beginning of the third quarter.