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Technology Stocks : Compaq

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To: hlpinout who wrote (46406)2/17/1999 7:24:00 AM
From: hlpinout  Read Replies (2) of 97611
 
By Neil Winton, Science and Technology Correspondent
LONDON, Feb 16 (Reuters) - European personal computer sales
should accelerate by at least 15 percent in 1999 and Compaq
Computer Corp CPQ.N said on Tuesday it expects to outpace
that.
Houston, Texas-based Compaq, the world's largest personal
computer maker, said there are some negative factors likely to
impact growth in Europe such as a weakening of the British
economy and an underperforming eastern Europe.
But mainland western Europe's economy, spending on fixing
the millennium computer bug, and meeting the requirements of the
new euro currency should underpin demand.
Experts are divided on prospects.
Dataquest, the Gartner Group IT.N subsidiary, reckons
European sales will increase 12.1 percent this year to 26
million. Software giant Microsoft Corp MSFT.O sees sales
gaining between 10 and 15 percent. British researcher CONTEXT
expects sales to boom by between 17 and 20 percent in 1999.
"We expect sales gains in western Europe to be a strong 15
to 20 percent this year," Andreas Barth, Compaq Europe's General
Manager told Reuters.
"You have various people making predictions about it but
nobody really knows exactly. We are seeing a couple of effects
here. There is some economic weakness in the UK, we are still
having eastern European economic weakness, and there is still
the question of how far can western Europe and the U.S. still
continue to be the locomotives of the world wide economy," Barth
said.
Barth later told a news conference that Compaq sales would
outperform the overall market in Europe, which was likely to be
closer to 15 percent.
Compaq does about 40 percent of its business in Europe,
totalling about $14.3 billion in 1998. Compaq led the market
with 16.9 percent of the just under 25 million total sales,
according to CONTEXT.
Compaq expects the overall IT market, which includes
computer hardware, software and services, to grow by around 10
percent to $254 billion in Europe this year.
Compaq is targeting the Internet in 1999 as a new way of
selling its products.
"This is because the world is changing. You see today that
everything is on the Internet. You can buy books on the
Internet, you can buy software, PCs, cars," said Barth.
This will also be a reaction to Dell Computer Corp's
DELL.O highly successful direct selling sales policy.
Compaq will launch its new Prosignia PC in Europe in the
first half of this year, Barth said. The Prosignia is designed
to be sold directly to small- and medium-sized businesses and
sales should start in Britain and France. He declined to offer
sales targets or prices.

REUTERS
Rtr 14:59 02-16-99

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