European PC market enjoys a healthy Q1

Market watcher IDC's figures reveal Western Europe is holding its own against its fast-growing Eastern European counterpart

The EMEA PC industry is in rude health with notebook sales driving the market according to the latest figures from analyst firm IDC.

Sales of desktops in the central Eastern Europe, Middle East and Africa (CEMA) were strong, with 19 per cent growth recorded in the region for the quarter, compared to last year. However the picture was not as rosy in the more commoditised Western European region, with a decline of 1.7 per cent in desktop sales for the quarter.

Notebooks sales continued on the upward curve, with shipments increasing 43 per cent in CEMA and increasing 12.6 per cent in Western Europe – thanks to shrinking prices fuelling demand from SMEs.

Eszter Morvay, senior research analyst for IDC’s EMEA PC Tracker, said: “Despite its maturity, the Western European PC market showed no signs of slowing down as overall shipments increased by 12.6 per cent year on year in the first quarter 2008.

“Mobility undoubtedly remained the key engine of growth across both consumer and business segments. While the quarter started slowly, demand picked up in mid-February and, with a robust March, notebook shipments were boosted by over 30 per cent, while desktop sales dropped by another 10 per cent. The transition from desk-based to portable platforms accelerated further in the consumer space in particular, where notebooks were 70 per cent of purchases.”

Morvay said the first quarter is traditionally buoyant with new product releases, which together with strong vendor push and active marketing campaigns, stimulated notebook renewals across the region.

“Competition, particularly with the arrival of Dell in the retail area, became even fiercer and the market continued to consolidate among the key international players,” she said. “In addition, the growing share of etailers and the increasing presence of telco players, with the development of appealing Internet bundles, also contributed to price pressures and stimulated market expansion as well as multiple equipment purchases in European households, which is expected to be a key driving trend in 2008."

Stefania Lorenz, director IDC CEMA Systems, said: “In contrast to declining trends in Western Europe, desktop sales continue to enjoy sustained growth in CEMA and represent over 50 per cent of the market, with a 9.2 per cent increase this quarter. This is driven by IT spending in the government and public sectors, SME and large enterprise segments.

“However, notebooks continue to grow at an impressive rate in both the Central Eastern European and Middle East and Africa regions and exceeded expectations with an increase by 72.5 per cent year on year in notebook shipments in Q1 for the two regions combined,” she said. “Price competition among vendors is intensifying and, as prices for notebooks fall, they are becoming more affordable to home users who increasingly choose a notebook, rather than a desktop, as their first PC. International brands are strengthening their focus on the consumer market by selling through the major retail chains and shopping malls in some of the largest countries, while vendors also continue to increase their presence in the region through new alliances with distributors across countries."

Karine Paoli, associate vice president IDC EMEA personal computing group, concluded the market was in a strong position.

"EMEA will clearly remain a major growth opportunity in 2008. While further market commoditisation is expected as prices continue to decline, the current evolution of the market, including from a user behavior standpoint, is creating huge opportunities for the IT industry. A large, and still growing, notebook installed base in the business market offers major replacement and upsell opportunities, while the constant expansion and changing dynamics in the consumer space also offer major opportunities - faster replacement cycles and multiple equipment purchases - as well as differentiation as the market evolves towards increasing segmentation and usage scenarios."

"The market will also benefit from an expansion of the available routes-to-market. Vendors will continue to reinforce their channel strategies to support their expansion and drive profitable growth, as the battle for share will remain fierce in the business segment, while on the consumer side, retail will continue to play a pivotal role in driving market expansion and new product adoption. However, focus will also be placed on better addressing the etailer channel and the development of mobile broadband offerings with telcos."