Michael Dell has been taunting HP lately by claiming his company is gaining server market share at HP’s expense.
Looks like he’s right: In HP’s second quarter, sales of industry standard servers—ones with x86 Intel and AMD processors—fell 12% compared to last year’s Q2.
But in HP’s Q2 earnings call, Meg Whitman said the server sales drop, and the market share HP lost, was due to “very aggressive competitive pricing.”
That’s fine with Whitman, who said HP decided not to do some server deals during the quarter because they weren’t profitable enough.
“We stepped away from a number of deals to protect our bottom line. And it’s clear that we need to take another look at the low end of our product line to better match customer needs and price points,” Whitman said on the call, according to Seeking Alpha’s transcript of the event.
HP also walked away from some PC deals for the same reasons, Whitman told AllThingsD’s Arik Hesseldahl in a post-earnings call interview. HP’s PC revenue dropped 20% compared to last year, with sales to businesses falling 14% and sales to consumers falling 29%.
Dell is taking on debt by slashing server prices, but it wouldn’t risk doing this it weren’t trying to go private, Whitman told AllThingsD. Dell’s first quarter earnings dropped 75% compared to last year.
“We’ll see if they remain as aggressive as they have been,” Whitman told AllThingsD.
Earlier this month, Michael Dell got ahold of preliminary figures from IDC that showed its worldwide server market share grew 2.4% in the first quarter, while HP’s dropped about 4%.
Dell’s worldwide server shipments grew 5.7% in Q1, while HP’s dropped 15.4%. HP still leads Dell in the global server market, with about 31% share compared to Dell’s roughly 28% share, according to IDC’s figures.
Michael Dell told CRN‘s Steve Burke earlier this month he likes where things are headed.
“HP is losing share at a staggering rate, and they are losing it to Dell,” he said.
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