MARKET WATCH - Year 2000 drives PC sales

Euro sparks purchasing frenzy in corporate and SMB sectors, but making systems millennium compliant remains overriding factor in plus 20 per cent shipment growth.

WESTERN EUROPE SUMMARY: 1998

corporate and SMB sectors, but making systems millennium compliant remains overriding factor in plus 20 per cent shipment growth. The strong performance in the fourth quarter of 1998 was preceded by high growth rates throughout the year, leading to an overall increase of 21.2 per cent last year. In total, 25 million units were shipped throughout western Europe.

PC sales in the first half of the year were high despite fears of high inventory levels carried over from 1997 and were mainly driven by the corporate and small and medium sized business sectors.

The second half of 1998 saw an increase in purchasing by the already strong corporate sector and, additionally, a rise in consumer PC sales. Getting IT systems ready for the implementation of the euro affected PC sales both in the corporate and SME sectors. Making their systems year 2000 compliant was of much higher urgency to the larger corporations than to smaller businesses.

This situation is expected to change in 1999, as more small and medium sized businesses are forced to bring themselves into line with their larger counterparts.

WESTERN EUROPE SUMMARY: Q4 1998

Volume shipments of PCs in Western Europe grew 22.2 per cent in the fourth quarter of 1998 to 8.8 million units compared with the same period last year, resulting from good performances throughout all European countries. High growth rates were primarily achieved through soaring demand in most of Europe's consumer markets, fuelled by bargain prices and attractive bundles. In the business sector, IT spending of large corporations remained high.

Specifically, performance in Europe's three largest PC markets continued to be good - France leading with a growth rate of 23.9 per cent, followed by Germany at 21.2 per cent and the UK with 18.6 per cent.

On the vendor side, Compaq retained the top European slot with 16.9 per cent market share. Dell slipped to third place with 7.3 per cent, overtaken by IBM with 9.3 per cent.

HP regained its fourth position with 5.9 per cent market share, closely followed by Packard Bell NEC with 5.8 per cent.