Europe's Consumer-PC Market
Grew 57 Percent
(05/10/99, 2:31 p.m. ET)
By Mark Hachman , Semiconductor Business News
Semiconductor makers tied to the PC market
can look to Europe asperhaps their hottest
market this year if the first quarter is any
indication, according to figures just released by
Dataquest, a unit of Gartner Group.
Spurred in part by the sale of lower-priced PCs into the
home market, European PC shipments in the first quarter
of 1999 increased 20 percent over the first quarter of
1998, Dataquest reported. Home-PC shipments in the
region grew 57 percent over the same period last year,
while the professional segment grew 9 percent in the
quarter.
"Ever lower prices, the allure of the Internet, and new
cost-saving channels, as well as innovative marketing
promotions, are all driving consumer growth," said Philip
Williams, senior industry analyst for Dataquest's PC
Quarterly Statistics Europe program in the United
Kingdom.
"Contrary to perceived wisdom that home users will play
to the same basic rules professional buyers have stuck to
-- of finding a price level they are comfortable with and
by and large just accepting increasing levels of
technology -- home buyers just want more, but at
substantially lower prices," Williams said.
While those lower prices will propel sales, and thus unit
volumes, of semiconductors for PCs, the pricing
competition will keep the overall revenue share of chips
for PCs relatively low. In 1998, 27 percent of all
semiconductor revenue was from the global PC market,
according to Dataquest, in San Jose, Calif.
"Unit volumes undoubtedly will go up," said Gary
Sheppard, a Dataquest semiconductor analyst, with the
bulk of shipments being microprocessors and memories.
Semiconductors' revenue share from PCs has been as
high as 36 percent, Sheppard said. "If it weren't for the
dramatic price declines of memory and CPUs, it would
still be in the mid-30s," he said.
This supports SBN's 1999 market outlook, which found
most analysts and observers predicting PC chip volumes
would rise as prices continue to fall. In the same outlook,
Europe was seen as likely the best-performing region for
semiconductor shipments in 1999.
The strongest player in Europe in the first quarter was
Fujitsu, because of its growth in the home market in
Germany and around Western Europe. Fujitsu took the
No. 1 position in the home market in total Europe for the
first time ever.
"The food retail channel in Germany sold 200,000 Fujitsu
PCs in a matter of days," said Williams. "This
demonstrates the degree to which the consumer market
is booming there."
Compaq performed well in the major European countries
to hold the No. 1 position in the overall market. Dell
continued to do well, as its first quarter 1999 shipments
increased 43 percent from the same period last year.
Dataquest attributed Dell's growth to its success in the
professional segment.
The region was led by Germany, where shipments
reached 1.6 million units, an increase of 34.6 percent
over the first quarter of 1998. The United Kingdom was
the No. 2 country with shipments of 1.4 million units,
which is up 24 percent from last year. France, the No. 3
country, had shipments reach 895,000 units, a 32 percent
increase over the first quarter of 1998.
These countries experienced even stronger growth in the
home market. Home-PC shipments in Germany grew
109 percent in the first quarter of 1999, while the United
Kingdom and France grew 75 percent each.
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