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


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.