EMEA Market Feels the Pinch – Global Economic Fears Impact PC Sales, According to IDC
LONDON – JULY 26, 2001 – According to preliminary data released today by IDC, PC shipments grew by 0.3% in Europe, Middle East and Africa (EMEA) and 1.0% in Western Europe in the second quarter 2001. As expected, consumer desktop sales remained weak, leading to a slight decline of the overall desktop market whereas Intel-server shipments displayed sustained double-digit growth. Reflecting overall caution in hardware spending, notebook sales recorded for the first time in many years, single-digit growth.
With an increasing squeeze on capital investments prompted by fears over the weakening state of the global economy, hardware investments were affected during the second quarter 2001, with many businesses postponing new equipment purchases to the latter part of the year. Nevertheless, essential renewals in the corporate market continued to take place, albeit at a moderate rate, and fierce vendor competition in the small and medium business markets contributed to sustained shipments of commercial desktops and Intel servers.
Directly affected by the overall economic climate, the notebook market grew by only 6.4%, contrasting with strong double-digit growth rates recorded over the last four years, and despite fierce competitition and lower prices, as well as the potential for growth in the consumer and small and medium businesses segment which also slowed down this quarter.
"With many companies exercising greater caution over hardware investments, it is unsurprising that notebook sales have been affected," said Andrew Brown senior analyst for Mobile Computing for IDC in EMEA. "Nevertheless, we expect the transiton to notebooks to continue, driven by further price declines, lower TCO, and the growth in technology such as wireless LAN into 2002."
The UK market was the most affected by the fears of a global economic slow down with PC sales declining, for the first time, by 4.4%. Germany also recorded a weak quarter, still suffering from low business and consumer confidence leading to a similar decline of 4%. France continued however to show sustained growth at 8.6% driven by the rebound of business investment in contrast with 2000 and Italy displayed strong double-digit growth. PC sales in Eastern Europe recorded healthy growth at 11.7%, driven by the smaller developing markets, whereas the Middle East and Africa region continued to be affected by another strong decline of PC sales in Turkey.
"The overall economic slow down in the U.S. and Asia will continue to impact the PC market. If we expect PC shipments in EMEA to rebound slowly towards the end of the year and into 2002, driven by business renewals and Windows XP in the consumer space, 2001 will be another year of slow growth in Europe," said Karine Paoli, Expertise Centre Manager, EMEA Personal Computing Group. "The EMEA region still presents opportunities for growth in the longer term as many markets have not reached saturation yet, especially in the mobile PC space, but the question of margin and profitability will remain, as the market has become more competitive than ever."
Vendor Performance Highlights
In a context of slowing demand, including in the notebook market, competition was fierce among all vendors. Dell and HP continued to gain share, displaying sustained double-digit unit growth and aggressive pricing strategies. The overall vendor ranking remains however unchanged, with Compaq maintaining its leadership in EMEA, but taking also the number one spot in the notebook segment.
Compaq confirmed its leadership in EMEA and maintained the gap with its challengers, with over 17% market share, despite overall moderate growth, as the leader faced increased competition across all form factors. If Compaq continued to dominate both the desktop and server market and recorded sustained sales in both markets, the leader also took the number one position in the notebook market.
Dell consolidated its number two position in EMEA, thanks to sustained double-digit growth across all form factors driven by aggressive pricing, and despite the slow down in corporate investments. Dell also continued to gain share in both the notebook and Intel server markets, recording outstanding growth in both markets, which enabled the vendor to take the number two position in the notebook segment.
Hewlett-Packard recorded another healthy quarter, and maintained its number three position in EMEA. Strong business desktop sales, large “affinity deals”, and aggressive pricing helped the vendor to retain its leadership in France. HP also continued to gain significant share in the notebook market across the region. A slower performance in servers can be attributed to a strong quarter last year.
Fujitsu-Siemens continued to suffer from the softness of the German market as well as fierce competition from the leaders across all form factors. The vendor however regained its number three position in the overall vendor ranking for Western Europe. FSC also continues to gain share in Italy, where the vendor took the number three position, as well as in Sweden and in the UK.
IBM continued to display healthy performance and recorded strong gains in the business market. Thanks to increased competitiveness in both its commercial desktop and server offering, Big Blue took the number two spot in the Intel server market, overtaking both Dell and HP. IBM’s limited presence in the low-end segment of the notebook market inhibited higher notebook volume growth.
Vendors outside the top 5 recorded mixed performances. Acer achieved steady growth despite fierce competition in the SMB market but continued to gain share in the Notebook segment, taking the number four position in EMEA in this segment. As a result of a strong decline of its shipments and suffering from aggressive competition from Dell and Compaq, Toshiba lost the leadership of the notebook market and dropped to the third place in both EMEA and Western Europe. NEC CI ‘s results were directly affected by the decline of the consumer market and slower Packard Bell sales. NEC however continued to gain share in the notebook market as well as in the Intel-server space. Apple recorded another negative quarter, as a result of slow consumer demand but continued to reduce channel inventory.
Top 5 Vendors, Europe, Middle East and Africa (EMEA) PC Shipments,
Second Quarter, 2001 (Preliminary) (Thousands of units)
Q2 2000 % Unit Share Units
Q2 2001 % Unit Share Unit Growth
Q2’01 v. Q2’00
Compaq (1) 1,338 16.6% 1,406 17.4% 5.1%
Dell 716 8.9% 819 10.1% 14.3%
Hewlett-Packard 600 7.5% 678 8.4% 13.0%
Fujitsu Siemens (2) 713 8.9% 638 7.9% -10.4%
IBM 561 7.0% 595 7.4% 6.0%
Others 4,115 51.2% 3,934 48.7% -4.4%
Total 8,043 100% 8,070 100% 0.3%
Shipments are branded shipments and exclude OEM sales for all vendors.
Data for all vendors are reported for calendar periods.
(1) Data for Compaq includes Compaq, Digital Equipment and Tandem products
(2) Data for Fujitsu Siemens includes shipments for Fujitsu and Siemens
Source: IDC EMEA, Preliminary Results, Q2 2001
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