Desktop sales cost PC vendors money

PC vendors are losing money on desktop sales despite strong growth over the last quarter.

The latest report from research house Dataquest shows that PC sales had increased by 5.6 per cent to 7.5 million units in the first quarter of this year. However, as PC prices fell, vendors were losing up to 4.2 per cent in turnover.

Isabelle Durand, analyst at Dataquest, explained that more individual users than corporates were buying PCs as many companies were still struggling to offset heavy Y2K expenditure.

Corporate spend on PCs increased only by 3.1 per cent compared to 11.5 per cent for private buyers.

However, Durand claimed there was also a shift in positioning for the top vendors. Compaq - Europe's premier PC vendor - lost a two per cent market share, as did Fujitsu-Siemens.

IBM also faired badly as its market share fell from 8.28 to 6.12 per cent - less than one per cent in front of HP whose share grew from 3.92 per cent to 5.27 per cent.