Hewlett-Packard Co. in the third quarter continued to expand its lead over rivals in the global PC market, while Taiwan based Acer saw the largest increase, displacing Dell as the world's No. 2 notebook maker.

HP shipped 13.1 million PCs, a 32.7 percent and 3.2 million unit increase from 9.9 million in the third quarter of 2006, according to market research firm, iSuppli.

The strongest growth, however, was seen from Acer, who's 68.8 percent growth pushed Dell down to third place, making the firm second only to HP for notebook shipments. Company PC shipments increased to 5.4 million units in the third quarter, up from 3.2 million in the third quarter of 2006. Acer's global PC market share rose to 7.9 percent, up from 5.4 percent during the same period in 2006.

Acer's ascension in market share is due to its strong performance in the notebook business, and its robust sales in the Asia/Pacific and European regions, said Matthew Wilkins, principal analyst for iSuppli. Acer is executing well in the channel and offering aggressive pricing.

Despite its impressive notebook shipments in the third quarter, Acer was unable to usurp its current nemesis, Lenovo of China.

This allowed Lenovo to retain its No.-3 position overall, with a market share of 8.1 percent, compared to Acer's 7.9 percent. Acer is almost certain to overtake Lenovo in the fourth quarter as a result of the Gateway acquisition and its continued momentum in the notebook PC market, Wilkins predicted.

Meanwhile, fellow U.S. PC OEM Dell underperformed the market with meager growth of 1.5 percent.

Dell shipped 9.9 million PCs worldwide in the third quarter of 2007, compared to 9.8 million during the same period in 2006. Company market share fell to 14.6 percent in the third quarter, down from 16.3 percent a year earlier. Dell posted the weakest growth among the Top-5 PC OEMs during the third quarter.

Despite a renewed focus on its PC business, and the return of Michael Dell to the company's helm, Dell's channel business is taking time to ramp up and have an impact on company sales, Wilkins said.