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Title: Europe PC Market Slows IBM Sales Plunge in Wake of Y2K Hangover RICHARD MEARES

May 3, 2000

EUROPEAN personal computersales grew at their slowest-ever rate in January to March, with the market leader, Compaq, and its rival IBM hit heaviest, new figures showed yesterday.

The market research company Context said overall sales were only 8 per cent higher than a year earlier  the lowest rise since the industry began.

Year-on-year sales grew 11 per cent in the fourth quarter of last year and 18.5 per cent the quarter before that. Context revised down the 10 per cent first-quarter figure it gave last month, and said 7.4 million PCs were sold in the period.

It said that only sales to consumers, encouraged by cheaper internet access, had meant there was any growth at all, whilst a slowdown in big business continued.

"The figures for this quarter clearly indicate the European PC market has not yet recovered from the slowing-down effect of Y2K [the millennium bug] on the corporate sector," said Inger Kwiatkowski, a Context analyst.

She said healthy demand from small businesses and consumers was good news for vendors with a strong presence in those markets. "We estimate the European PC market will grow 10 to 15 per cent this year, and most probably at around 12 or 13 per cent," she said.

"We dont think it will be much above 10 per cent for the next quarter. We have some figures in for April already and it does not look like things have suddenly been picking up."

Compaq sales in western Europe fell 8.5 per cent but it remained the top seller, shipping 1.1 million units compared with Fujitsu-Siemens 832,000 and Dells 708,000.

IBM saw sales slump 22 percent to 487,000, leaving it in fifth place behind Hewlett-Packard. HP sales jumped 34 per cent to just under 550,000.

Sixth-placed Toshibas sales saw the fastest growth, to 377,000  almost 40 per cent higher than a year earlier and a result of its lead in the buoyant portable computer market.

Overall demand for corporate desktop PCs fell 6 per cent but the market for notebooks grew 33 per cent. "The high growth rates for HP, Toshiba and Apple were largely fuelled by notebook demand," Context said.

Consumers bought 24 percent more computers than in the first three months of 1999.

"The outlook for the European consumer market for 2000 is positive," said Ms Kwiatkowski. "We expect this market segment to continue to grow at a healthy pace as increased affordability of internet access in Europe is expected to increase demand for home PCs."  Reuters http://www.scotsman.com/cgi-bin/t3.cgi/taf/business.taf?function=detail&Scotsman_uid1=TS00046575&desk=Business&cat=business&sec=9

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-- (Dee360Degree@aol.com), May 03, 2000