Toshiba Catches Up To Compaq

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March 23, 1998 (12:00 AM EST)

By Roger C. Lanctot,

Toshiba has rebounded from a nosedive in its retail computer market share late last year to draw even with Compaq Computer in February. Both companies captured about 29.5 percent of retail unit sales, according to PC Data, which released February hardware sales data last week. Compaq kept a 3.8 percent market share edge in retail notebook revenue.

Both PC Data and Computer Intelligence's StoreBoard sales auditing program had Compaq outselling Toshiba between September and January. PC Data's February sales report showed overall retail notebook unit sales up 1.5 percent in February with revenue down 7.3 percent. That seemed at odds with the results at most retail stores, which have been reporting to CRW strong demand across the board at all price points in notebook computers. "Our notebook sales are very strong," said one hardware merchandise manager who asked to remain anonymous. "It's stronger than we thought it would be this time of year."

Toshiba's gain came despite a negative comparison to February 1997 sales. While Compaq nearly doubled its revenue with a 76.6 percent increase compared to the year-ago month in February and more than doubled its unit sales, Toshiba saw a 31.7 percent decline in year-to-year unit volume in February and a 35.1 percent reduction in revenue.

From an average price standpoint, Compaq has reduced its average price per unit sold by more than $500 compared to February 1997, dropping from $2,669 last year to $2,149 in February 1998. Toshiba's average retail selling price fell by only $100 from $1,981 to $1,882 during the same time frame. With the overall average retail price of a notebook computer only falling about $200 from $2,209 in February 1997 to $2,017 this past February, it is clear Compaq has aggressively pursued notebook computer market share. The overall average selling price data also suggests that Toshiba, with an average price at $130 below the overall average, is selling at a discount to the market.

"You see from the data that Compaq had to bring their pricing down $500 to compete with Toshiba," said Stephen Baker, senior analyst at PC Data, in Reston, Va. "It also shows that Toshiba is not getting a premium for their products. Their prices are below the overall average."

Toshiba was able to seize the initiative in the retail market in February with the onset of two new Satellites, the 305CDS, which was the best-selling retail notebook computer in February, and the 315CDS, which was the fifth best-selling model. Compaq accounted for the second, the third, and the fourth best-selling models, the Presarios 1220, 1621, and 1681, respectively. The popularity of those two Satellite models was significant given the fact that Toshiba had only the fourth best-selling model in January 1998, with Compaq taking the top three positions.

Toshiba will have a challenge to move past Compaq. Retailers say Toshiba continues to have an uneven supply of notebook computers, with Compaq better able to fill retail orders. Retailers praised the efforts of the new marketing team at Toshiba to improve the product supply situation, but said vendors such as Hitachi and Fujitsu are ready to pounce if either Compaq or Toshiba slip up.