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To: Urlman who wrote (61905)	8/5/1998 7:44:00 PM
From: Joey Smith	Respond to of 186894

ALL: Compaq see continued strong PC demand in Europe! joey Compaq Sees Continuing Strong European Demand (08/05/98; 1:08 p.m. EST) By Reuters FRANKFURT, Germany -- Compaq said Wednesday it expected European demand for PCs to remain firm in the second half of 1998, with growth rates in the region topping those in North America and Asia. "Overall, we see very strong growth in the last two quarters of the year," said Werner Koepf, vice president of Compaq's general business group for Europe, the Middle East, and Africa. Koepf, in an interview with Reuters, also predicted the company ( company profile) would continue to expand in Europe at rates above the market average. "We grew much faster than the market in the second quarter. We are in a very good position," he said. According to market researcher Dataquest, European PC unit sales increased 19.5 percent in the quarter, compared with a 12 percent rise in the United States. San Jose, Calif.-based Dataquest said Compaq's second quarter shipments to European distributors rose 26 percent and gave the computer maker a market share of 15.5 percent. Dell passed IBM to take second place in market share. The direct marketer's sales increased 79 percent from the first quarter, while IBM saw only a 9 percent rise, according to Dataquest. Hewlett-Packard and Siemens rounded out Europe's top five vendors. But Houston-based Compaq said its unit shipment total was dampened by efforts to reduce distributor inventories, and that units sold to end customers were significantly higher. "If you take end user sales in the second quarter, we have been growing at twice the market rate -- at over 40 percent," Koepf said. Compaq began the year with about eight weeks of inventory in the distributor channel, but cut that to three-and-a-half weeks at the end of June. "We are still trying to reduce it, but we are pretty happy," Koepf said. Koepf said Compaq was also beginning to see growth stemming from its recently completed takeover of Digital Equipment, in Maynard, Mass. "Digital would add about two points of market share," he said. "In July, the PC business for Compaq was extremely high, so I believe we are seeing customers switch over from Digital-branded products to Compaq." Koepf said the economic revival in Germany, France, and other key European economies was driving PC demand in the region. In Scandinavia, special offers to encourage employees at many large companies to buy PCs continued to spark growth rates of 70 percent or more. "The economy is going very well, and there are some purchasing incentives in some countries that are really helping demand," Koepf said. "We expect Europe, the Middle East, and Africa to lead worldwide growth."