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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: E.H.F. who wrote (21705)	3/13/1998 7:02:00 PM
From: Mohan Marette	Respond to of 97611

Now a bit of good news-Europe is where it is at ! -------------------------------------------------------------------------------- Friday March 13, 5:25 pm Eastern Time Europe PC sales seen firm despite concerns in U.S. By Neal Boudette FRANKFURT, March 13 (Reuters) - European personal computer sales continue to rise, despite reports of slackening U.S. demand by bellwethers Intel Corp (INTC - news) and Compaq Computer Corp (CPQ - news), analysts and PC suppliers said on Friday. European sales were getting a boost from employer-sponsored PC purchase programmes, falling prices and unflagging corporate buying, they said ahead of next week's CeBIT trade fair in Hannover. ''Demand in Europe is not a problem,'' said Chris Jones, an analyst at market researcher Dataquest in London. ''In the talks we've had, vendors and resellers have been pretty positive on the first quarter so far.'' Jones said Dataquest was expecting European PC sales growth in the mid-teens in 1998. Earlier this month Intel Corp, Compaq Corp and Motorola Inc (MOT - news) rocked technology stocks with warnings their first-quarter results would disappoint. Intel and Compaq said PC demand, especially in the U.S., was weakening. The U.S. market had led the industry to growth rates of 15 to 20 percent for the last few years. But Europe is on a roll heading into CeBIT, the massive computer and telecommunications trade show where most major suppliers will announce new products or strategies. ''I see further growth for IBM in the PC market in 1998,'' said Christian Hildebrandt, head of IBM's PC business in Germany. The German unit of direct marketer Dell Computer Corp (DELL - news) was also seeing no let up in demand. ''The acceptance of the direct business is increasing and there are a lot of opportunities for us to grow,'' Hans-Juergen Mammitzsch, managing director of Dell Computer GmbH, told Reuters recently. While Compaq's U.S. sales were suffering from inventory on store and dealer shelves, PC sales in Scandinavia have soared as thousands sign on to purchase programmes backed by some companies and unions. ''The programmes let you pay $50 a month out of your paycheque, so you get a tax benefit as well as a new PC and printer,'' Jones said. In other countries, the arrival of bargain-basement PCs has set off a buying frenzy. In Germany, for example, home PC sales have jumped as cash-and-carry discounters Aldi and Lidl have added low-cost PCs to their aisles on occasion. ''They've moved 80,000 units in two days when they have PCs in stock,'' said Thomas Reuner, a Dataquest analyst who focuses on Germany. Meanwhile, Europe's booming corporate giants have kept commercial demand firm. ''We are also expecting further, steady growth in our large customer business,'' IBM Deutschland's Hildebrandt said. But while sales are on the rise, profit is still a concern, especially in the consumer segment. IBM this week announced a plan to turn over production of some IBM-labelled home PCs to Vobis Microcomputer AG, Germany's top PC supplier, in an effort to lower costs and gain recognition in Vobis' 400 stores. But Reuner said it is unclear how the deal will improve margins since Vobis, a unit of retail group Metro AG (MEOG.F), is licensing the IBM name and products through Comtech, another assembler that signed a similar deal last August. ''Vobis will have to pay Comtech and IBM and consumer margins are already too thin,'' he said. On Thursday Vobis said it expected 1998 sales to rise to more than six billion marks ($3.3 billion) from 4.6 billion last year, but in terms of profit 1998 would be ''a difficult year'' with only a slight rise. ($ equals 1.827 German Marks)