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::BUSINESS

IT market to grow although PC sales fall
Friday, January 18 2002
by Matthew Clark

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Although PC sales were down 5.1 percent in EMEA in the last three months, IDC says Western Europe's IT market will grow 6.4 percent in 2002.

The US-based research firm said on Friday that according to preliminary data, PC shipments in the Europe, Middle East and Africa markets declined by more than five percent, in part as a result of weak corporate demand. For the full year, PC shipments were down by 3.6 percent in the EMEA region.

"Corporate investments continued to be affected by a squeeze on budgets and cost-saving strategies, with many companies postponing non-essential hardware renewals until 2002, affecting both desktop and notebook sales," IDC claimed. Moreover, consumer demand for desktop computers remained poor despite the Christmas holiday and Microsoft's launch of Windows XP in the quarter, which only gave the industry "a marginal lift," the research firm said.

However IDC offered some positive news, saying demand from small and medium businesses remained strong and helped limit volume erosion. Additionally, the consumer market for portable computers remained strong and was driven by attractive product offerings, lowered prices and a continuous push in the retail channel, said Andy Brown, research manager for mobile computing at IDC.

But the business market for laptops and notebooks was depressed. "With few vendors benefiting from end-of-year fiscal budgets as a result of cutbacks, the business notebook market continued to mark-out a sluggish dynamic," explained Brown.

Other important figures from the report said that the top five PC vendors now represent 45 percent of total EMEA sales. Compaq remained the number one seller in the overall PC market in EMEA and took the first position in the EMEA notebook market for both Q4 and the full year 2001. Dell came in at second place and shipped in excess of one million units in a quarter for the first time. Hewlett Packard, Fujitsu-Siemens and IBM came in third, fourth and fifth respectively, for both the fourth quarter and the full 2001 year.

Despite the decreased PC shipment figures in 2001, the Western European IT market is forecast to grow by almost 6.5 percent in 2002 as it recovers from the slowdown caused by 11 September. In a separate report, IDC said that while the growth will not meet the 9.4 percent growth figure for 2000, it would surpass 2001's 5.5 percent growth rate.

While the news appears positive, "recovery will be slow in some areas," IDC warned. "IT vendors are likely to experience tough sales cycles in the early part of 2002 as many companies continue to adopt a wait-and-see approach," said Vicky Hawksworth, research analyst in IDC's EMEA IT markets team. "If the region stays clear of recession, however, an upturn in the economy before the end of the year will result in increased IT spending in the second half of 2002 and into 2003.

Ireland and the UK are both expected to weather the storm, IDC said. "Both IT markets will experience slower growth this year, mainly in hardware, but this is expected to be a short-term slowdown," explained Fung-Yee Tang, senior research analyst in the EMEA IT markets team.

She told ElectricNews.Net that IDC's figures for growth over the next 12 months had been cut back due to the overall weakness in the US economy. But she said that of all the world's major regions, Western Europe is predicted to be one of the fasting growing areas. The most resilient sector will be IT services, which in turn will lead to increased spending in the software sector, IDC said.

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