However Compaq still struggled against lower-cost competitors with direct sales channels such as Dell who took over the top spot of PC manufacturer from Compaq in 2001. Compaq relied significantly on reseller channels, so their criticism caused Compaq to retreat from its proposed direct sales plan, although Capellas maintained that he would use the middlemen to provide value-added services. Despite falling to No. 2 among PC manufacturers, Capellas proclaimed "We are No. 2 in the traditional PC market, but we're focused on industry leadership in the next generation of Internet access devices and wireless mobility. That's where the growth and the profitability will be." The company's longer-term strategy involved extending its services to servers and storage products, as well as handheld computers such as the iPAQ PocketPC which accounted for 11 percent of total unit volume.