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Jeff Fox
Europeans seen buying more PCs than ever in 1998
Reuters Story - January 26, 1998 16:54
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By Neil Winton, Science and Technology Correspondent
LONDON, Jan 26 (Reuters) - Europeans will buy more personal
computers than ever in 1998, said
British technology research company Context on Monday.
And the biggest four companies in the European market - all
American - will consolidate their lead in 1998 and fatten profit
margins, said Emmanuel Lalloz, senior personal computer research
analyst at Context, which published a report on the sector on
Friday.
"The PC industry (in Europe) is doing well, there's no
reason why 1998 shouldn't be even better. The consolidation of
the big four - Compaq, IBM, Hewlett-Packard, Dell - will
continue," Lalloz told Reuters in an interview.
However, one possible threat to profits comes from Asia,
where companies hit by the economic fallout there might seek to
dump personal computers on the European market, Lalloz said.
Context's report showed that western European personal
computer sales last year rose 14.5 percent to 19.4 million,
their highest level to date. In 1996 sales had risen 11.5
percent. This was driven by sales to businesses. Consumer sales
were disappointing.
Compaq Computer Corp , which earlier today announced
takeover of fellow American technology company Digital Equipment
Corp for almost $10 billion, was market leader with 15.1
percent - up from 12.4 percent in 1996.
International Business Machines Corp was second with
9.5 percent of the market, followed by Hewlett-Packard Co
with 6.7 percent, and Dell Computer Corp with
5.8 percent.
The highest-ranked European company was Siemens Nixdorf AG
(SNI) , in fifth place, with a market share of 5.5
percent.
Context includes notebooks, servers, work stations and desk
tops in its definition of personal computer.
Lalloz said that although the big four would continue to
dominate, the next tier of competitors were also gearing up for
a sustained attack on sales.
"The second group of challengers have strong potential for
growth too -- companies like Fujitsu Ltd , Toshiba Corp
of Japan, Germany's SNI, and <Acer Group> of Taiwan --
have extremely good products, and prices are coming down,"
Lalloz said.
"There is an industry worry that Asians will dump as many
models as possible at very low prices on the European market,
and that would accelerate the price war that is happening now.
There's always been a price war, it's just gaining momentum,"
said Lalloz.
Lalloz said that the big four were now turning their
attention to profit margins, and trying to organise their flow
of stocks better.
Profit margins on high-end products like servers and
work-stations are fat and likely to get fatter, according to
Lalloz
The long promised mass market is still a distant dream for
computer makers.
"The technology is still a problem for the mass market.
They've (the PC makers) have swamped the computer freak niche,
and those with lots of disposable cash all have computers."
"They will have to rethink how to sell to mass markets."
New technology coming on to the market this year may provide
the breakthrough. Chip makers like Advanced Micro Devices Inc
are providing cheaper chips and starting to make a dent
in Intel Corp's huge market share, and pressurise
prices.
Lalloz expects new marketing techniques to appear this year.
This will include more leasing, and guarantees that computers
will be upgraded free of charge to keep pace with technological
improvements.
This would take some of the hesitancy from consumers worried
that whatever they buy will quickly become obsolete.
Lalloz said computer buyers wanted a period of calm.
"They want to settle down for a while and let products
stabilise. At the end of the day people just want a product that
works. They are fed up with upgrading this and that. Lots of
them are still trying to figure out (Microsoft Corp's )
Windows 95," Lalloz said. |
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