The computer industry is all about market share. Dell’s report fueled reports that not only is Dell’s world-wide market share decreasing, but its losses are worse that expected. Dell’s consumer business was the only area that saw units increase year-over-year (17%) , however, declining average selling prices (ASPs) in the industry still saw consumer revenues decrease by 10% over the same period last year.

Unlike its competition, Dell blamed some of the losses on the recent Windows 7 launch. This contradicted Microsoft’s CEO Steve Ballmer’s comments later in the day in which he stated that “We’ve already sold twice as many units as any OS in a comparable time frame”.  Any issues related to the Windows 7 launch seem isolated to Dell based on this and other news reports.

Michael Dell has had over two years now to confront the changes in the PC industry and try to guide Dell on a positive path. One can blame the recession and other factors, however, time seems to be running short as other companies in the industry are performing well and stealing share from the former #1 computer OEM. Its reliance on commercial sales in mature markets underlines that Dell may not be positioned to tackle the consumer and small business sales opportunities in smaller, emerging countries. It will be interesting to see what recourse Michael Dell has to get Dell back on track.

The personal computer maker will report results for the quarter on Nov. 19. Analysts surveyed by Thomson Reuters estimate Dell will earn 28 cents a share on $13.1 billion in sales for its third quarter. During the same period a year ago, Dell earned 37 cents a share on revenue of $15.2 billion.

Investors are looking forward to hearing how Dell’s strategy shift is progressing in light of a highly competitive environment with HP, Acer and Lenovo. In September, the company acquired Perot Systems Corp. for $3.9 billion establishing Dell as a player in the information technology services market.

During the quarter, Dell also lost its place as the #2 PC company in the world to Taiwan’s Acer Inc. (2353.TW, ACEIY). Acer’s PC shipments rose 23.6% to 12.5 million units, giving it 15.4% of the market. By contrast, Dell’s shipments fell 6.7% to 10.3 million units which equated to a 12.8% market share.

Both companies continue to trail H-P in worldwide PC sales.

Dell still maintained the top spot in the U.S., with 4.7 million shipments and a 26.2% market share. However, those results were colored by the company’s U.S. shipments falling almost 9% from a year ago.