Europe PC sales fade amid brighter trend
By Reuters
January 18, 2002, 6:25 AM PT
LONDON--Sales of personal computers in Western Europe fell in the fourth quarter, but not as sharply as in the third quarter because of increased consumer interest and improved year-on-year comparisons, Gartner Dataquest said Friday.
"Europe has caught a cold, but not nearly as bad as the U.S.," said Gartner analyst Brian Gammage.
Gartner, a leading computer researcher, said it expected 2002 to be a flat year that could see some modest growth after a disastrous 2001, which saw PC unit sales fall for the first time since 1985.
However, in the absence of interesting new computer technology, sales growth would be the result of a continued price war led by U.S.-based Dell Computer and discount producers such as Germany's Medion, said Gammage.
He dismissed Microsoft's bearish expectations for a "mid-single digit" PC unit sales decline in 2002, expressed in a fourth-quarter results conference call late Thursday.
"They were too optimistic at the launch of (the new operating system) XP in October when they saw some 10 percent growth, and now they've gone the other way. They're overcompensating," Gammage said.
Regardless of a general economic recovery, sales comparisons will be favorable in the second half of this year, vs. the weak second half of 2001, he said.
Unit sales in Western Europe were down 4 percent year on year in the fourth quarter, compared with an 11 percent year-on-year drop in the third quarter, which was disrupted by the Sept. 11 attacks and economic uncertainty.
Shipments for the entire region of Europe, the Middle East and Africa (EMEA) were down just 0.4 percent as double-digit growth in Eastern Europe nearly offset the fall in Western Europe, where some countries are close to saturation levels of 50 percent.
"PC penetration is some 60 percent in the U.S. but perhaps Europe won't reach the same level, because of the high penetration of TV set top boxes, which offer rudimentary e-mail and web access," Gammage said.
Earlier Friday, Gartner said worldwide unit sales were down 4.6 percent in 2001. U.S. sales fell by 11.1 percent. EMEA shipments in 2001 were up 0.2 percent, again supported by growth in Eastern Europe.
Dell wins again
Dell continued to savage the competition, cutting prices on the back of its efficient business model of direct sales and built-to-order production.
Its shipments in EMEA rose 32 percent for an 8.6 percent market share, up from 6.5 percent in the year-ago period, creeping closer to leader Compaq Computer, which saw its market share fall to 12.7 percent from 14.3 percent.
The only other manufacturer to grow share in the fourth quarter was U.S.-based Hewlett-Packard, now sharing third place with Japanese-German joint venture Fujitsu-Siemens, both having market share of 7.9 percent.
For the full year, H-P inched ahead of Fujitsu-Siemens with a 7.7 percent share (6.7 percent in 2000), vs. Fujitsu-Siemens' 7.6 percent (8.7 percent in 2000).
Dell also overtook Fujitsu-Siemens, the U.S. company now No. 2 with 8.8 percent, versus 7.4 percent in 2000. Compaq ended the year with 12.8 percent (13.8 percent in 2000).
Fujitsu-Siemens managed to slow down its eroding sales in the fourth quarter, as it concentrated on the business segment.
All major manufacturers are now outsourcing all or a large part of their production, in an attempt to cut costs. Increasingly companies were cutting out intermediaries, mimicking Dell's direct-sales model.
It would take until 2003 before wireless networks, such as 802.11, also known as "Wireless LAN," would begin to drive additional demand for PCs, Gammage said.
The U.S. attacks had slowed down the launch of 802.11 in hot spots such as airports, because of security concerns.
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