PC shipments declined by 9.5 percent in Europe, Middle East and Africa (EMEA) and 12 percent in Western Europe in the third quarter 2001 over the same quarter a year ago, reaching just below 7.8 million units, according to data released by IDC. As a result of the growing impact of the US economic downturn, worsening economic conditions in Europe impacted PC sales in the region.
The UK market had already been affected in the second quarter due to its strong trade links with the US, but fears of a recession have spread across most European countries. July and August shipments were down substantially and that trend continued in September. High channel inventory at the end of the second quarter also contributed to lower vendor shipments.
The terrorist attacks on September 11th had little impact on the European PC market during the quarter but certainly contributed to exacerbate the already worsening economic situation.
Corporate investments were heavily affected by an increasing squeeze on budgets, with many companies putting on hold non-essential hardware renewals and large projects.
Sustained demand from small and medium businesses helped limit volume erosion but growing economic concerns could lead to more cautious investments in the coming quarters.
Desktop computers continued to be most affected by the cautious business climate as well as a lack of consumer rebound, leading to a 12.5 percent decline in year on year shipments.
The “back-to-school” market also failed to stimulate higher volumes. The notebook market remains more buoyant but suffered from delayed projects from the largest corporate accounts and recorded flat growth at 0.9 percent. Nevertheless, consumer notebook sales remained more robust.
“The harsh economic climate and ensuing budget restrictions continued to affect corporate spending on portable PCs during the third quarter, said Research Manager for Mobile Computing at IDC Andy Brown. “However, consumers and small enterprises showed a greater propensity towards mobile purchases, encouraged by sharp price declines and better product positioning” he added.
The UK PC market declined by 15.5 percent as the gloom of a global economic downturn continued to affect business investment. Germany also recorded a weak quarter, still suffering from low business and consumer confidence, with a decline of 14.2 percent. France was not able to sustain the growth from the previous quarter and declined by 18.2 percent. Only Italy, among the largest Western European markets, managed to record positive trends with PC sales growing by 11.5 percent.
PC shipments in Eastern Europe recorded healthy growth at 13.8 percent, driven by strong double-digit growth in Russia, whereas the Middle East and Africa region continued to be affected by an important decline in Turkey and Israel.
“If the impact of September 11th on the European PC market outlook is difficult to extract as a single cause, it will certainly accelerate downward trends in EMEA, creating additional loss of confidence for businesses and consumers alike,” said Karine Paoli, IDC’s EMEA Personal Computing Expertise Center Manager. ” Worsening economic conditions will add to an already slowing PC market and affect the prospects of a larger rebound,” added Paoli.
In a context of shrinking demand, vendor competition will remain fierce and margin erosion will lead to further rationalization and consolidation, already highlighted by the exit of a major international vendor, Gateway, from Europe, and the announcement of the merger between HP and Compaq.
Compaq retained it leadership of the overall PC market in EMEA but suffered from declining demand as well as fierce competition across all product lines. The announcement of the potential HP-Compaq merger early in September did not help the vendor increase confidence amongst its customer base.
Dell consolidated its number two position in EMEA and recorded the only positive growth among the top five vendors. Dell’s ability to execute an efficient go-to-market strategy remains a key component of the direct vendor’s success. Its price-performance value proposition meets growing demand in a time of economic turmoil.
Fujitsu-Siemens continued to face increased competition in its key market, Germany, and suffered from cautious business investments across Europe which prevented more positive growth elsewhere. Hewlett Packard ‘s performance was inhibited by limited corporate investments and overall shipment growth was negative. HP continued to gain important share in the notebook space, as well as in the retail channel.
IBM recorded sustained commercial results across all product lines but its overall performance was affected by a strong decline of its consumer sales generated by “affinity deals” in Q3 2000. — (menareport.com)
© 2001 Mena Report (www.menareport.com)
