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Technology Stocks : Compaq

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To: hlpinout who wrote (46406)2/9/2000 7:22:00 AM
From: hlpinout   of 97611
 
European Computer Sales Rose 11.3% in 4th
Qtr, Led by Compaq
2/8/00 10:00:00 PM
Source: Bloomberg News

London, Feb. 9 (Bloomberg) -- European personal computer sales rose
11.3 percent to 9.8 million units in the fourth quarter of 1999, with
Compaq Computer Corp. maintaining its No. 1 position, according to
GartnerGroup Inc.'s Dataquest.

International Business Machines Corp. dropped to fourth position from
second, pushed out by the Fujitsu Siemens Computers joint venture. Dell
Computer Corp. slipped one notch to No. 3.

Overall in 1999, PC shipments rose 19
percent to 27.6 million units, slower
growth than in 1998 as companies fixed or
upgraded their computers rather than buy
new ones. That slowdown was more than
offset by consumers buying home PCs in
a rush to get on the Internet. This year,
Western Europe will see 18 percent
growth, led again by home PCs, and
growth will average 16 percent though
2003, according to Dataquest.

'' The strength of the home market is
really surprising,'' said Howard Seabrook,
service director at Dataquest. ''Everybody
wants to be on the Internet. Countries
slow to adopt PCs like Spain, Portugal
and Italy are growing and it seems
unstoppable.''

Fourth-quarter sales of home PCs rose 20 percent to 3.32 million, led by
Packard Bell NEC Inc., while corporate sales rose just 6 percent. In
2000, Dataquest predicts 22 percent growth in home PC sales and 16
percent growth in professional sales as companies start to replace older
models.

Compaq Slips

While it held on to the top spot overall, Compaq's market share slipped to
15.1 percent from 17 percent a year earlier. It was the first quarter of
operations for the Fujitsu Siemens venture, which had more market share
than its combined sales in the same quarter of 1998.

''Overall it's a credible performance to stay at the top -- what must be
worrying is that (Compaq's) margin over the others is being eroded,'' said
Seabrook. ''With Fujitsu-Siemens, somehow they've pulled it off and
actually grown the business on the back of consumer sales.''

Sales of laptop computers rose 22% to 1.4 million units, led by Compaq,
Toshiba Corp. and IBM. Apple Computer Inc. began shipping its iBook
notebook, a companion to the iMac model, in the fourth quarter. The
combination helped Apple jump to seventh from 10th place overall in the
PC market.

Eastern European sales rose 13 percent, posting higher growth than
Western Europe for the second straight quarter. Western European sales
rose 11.1 percent.

For 2000, one question mark is Microsoft Corp.'s new Windows 2000
operating system, Seabrook said. While it may spur buying of more
powerful PCs, it could also prompt companies to switch to powerful
servers to run the software and simpler, cheaper terminals for users.

In either case, the sale of home PCs should continue to be strong and
the vendors will attack the market to replace older models at businesses,
said Seabrook.

''The PC market is conditioned to growth,'' Seabrook said. There's not
going to be any slowdown from the vendors. The question is, how are
they going to grow and are they going to do it profitably. ''
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