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To: Boplicity who wrote (12928)	4/23/2001 12:31:51 AM
From: 2MAR$	Read Replies (1) \| Respond to of 13572

Computer Sales In Europe Show Surprising Strength, so will it continue? By David Pringle Staff Reporter The European personal computer market held up better than expected in the first quarter, according to provisional figures from two market research firms. U.K.-based Context said that unit sales in Western Europe grew 7% over the year-earlier level to about 8.25 million, while International Data Corp. said that unit sales in Europe, the Middle East and Africa grew 4.4% to just over nine million. The U.S. PC market, by contrast, contracted by 9.5% in the first quarter, according to IDC, which is based in Framingham, Massachusetts. "The tremendous slowdown in the U.S. has tinged what is happening in Europe," said Jeremy Davies, a senior partner with Context. "But it was not as bad as people were saying." IDC reported that demand from businesses in Europe was relatively strong. "A tentative business recovery offset a dreadful consumer market," said Andy Brown, an analyst with IDC in London. Just last week, U.S. PC maker Hewlett-Packard Co. and Dutch giant Philips Electronics NV warned that European consumers are cutting back on technology spending. Ironically, H-P's performance in the first quarter in Western Europe was "little short of astonishing," according to Context. The market research firm said that a sustained promotion in the business market boosted H-P unit sales 39%, lifting the company into third place behind Compaq Computer Corp. and Dell Computer Corp. Aggressive price-cutting also helped Dell gain market share, Mr. Brown at IDC said. Both research firms said that Fujitsu Siemens Computers, a joint venture between German company Siemens AG and Fujitsu Ltd. of Japan, slipped from second place to fourth, although Context figures show its server sales rose 80% and shipments of mobile PCs were up 30%. Judith Grindal, a spokeswoman for the joint venture, said it conceded market share in Germany, where it is the No. 1 supplier, to focus on "profitable business" elsewhere. Most of the major PC vendors are trying to sell more servers and mobile PCs to compensate for the slowdown in demand for desktop machines. Despite the better-than-expected performance in the first quarter, there is little sign that the European PC market will return to the roughly 20% annual growth rate of 1998 and 1999. H-P warned last week that the second quarter isn't shaping up well. "In Europe, what we've seen in this quarter obviously is a rapid slowdown in consumer spending. It has hit both our European PC and our European consumer ink jet (printer) business," Carly Fiorina, H-P's chief executive, told analysts in a conference call. Ms. Fiorina said that European businesses have also become markedly more cautious over the past few weeks. Still, the arrival of new operating systems from Microsoft Corp. may persuade some businesses and consumers to upgrade, while the falling cost of PCs equipped with drives that can record compact discs may give the consumer market a lift, according to Mr. Brown at IDC. In the first quarter, France was the strongest of the big European markets. Good demand from businesses helped the market recover after a poor fourth quarter in 2000 and post nearly 12% growth over the previous year, according to IDC. Spain and Eastern Europe also recorded double-digit growth, but a lack of consumer confidence in Germany and the U.K. meant that unit sales in those markets rose by only 1.3% and 6.4% respectively, IDC said. Turkey's economic woes led to a 15% fall in overall unit sales in the Middle East and Africa, the U.S. research firm added. (END) DOW JONES NEWS 04-23-01 12:30 AM * end of story *