PC sales fall hard

PC sales in Europe are down by 12 per cent and still falling rapidly, scotching any thoughts of an early upturn in the desperate market.

The UK performed particularly weakly, showing a 16 per cent decline on the previous year. Analyst house IDC predicted further consolidation and downsizing, exemplified in this quarter by the exit of Gateway from the European market, and the HP-Compaq merger.

IDC says it does not expect a rebound until the second half of next year.

The situation could have been worse had small business (SME) sales failed to hold up. Corporate purchases were hardest hit, due to PC budgets being slashed in large firms.

IDC analyst Sami Pohjalainen said in the current negative economic climate PC purchases were the first to get hit: "Traditionally businesses look to replace PCs every three years - now this life-cycle has risen to four or even five years in many businesses."

In addition IDC says it does not expect Microsoft's launch this week of its new operating system - XP - to boost the flagging market.

In IDC's latest quarterly figures for the EMEA region, Dell was the only major computer manufacturer to buck the downward trend, increasing its shipments by 6.6 per cent on the previous year. However, it failed to take the top-spot from Compaq, which remains a long way ahead of the field with 16 per cent of the market.

Compaq was hit hard by the downturn - despite retaining its number one spot - with customer confidence sapped by the intended merger with HP.

Pohjalainen added: "It continues to be difficult for other vendors to match Dell's performance. Its cost-per-unit is quite simply in a league of its own."

IDC commented that the European market was far from saturated, but that PC-makers were not providing businesses and consumers with any reasons to buy new PCs.

Despite the bad news the EMEA region still outperformed the US - US figures out last week showed sales falling by over 20 per cent.