European businesses' spending on PCs dropped during the fourth quarter of 1999, while consumer PC spending rose, according to the latest figures from analyst IDC.
PC shipments in Europe, the Middle East and Africa (Emea) rose by 14.7 per cent overall in the fourth quarter of last year to more 11 million units. This compares with a growth rate of 15.6 per cent in the same quarter of 1998.
According to the preliminary data, Western European PC sales increased by 13.4 per cent year on year, resulting in what IDC describes as a "healthy" 17 per cent unit growth for the full year 1999.
PC market leaders suffered from the slowdown in corporate renewals at the end of the year, said IDC. However, consumer sales partly compensated for the shortfall driven by Internet demand and the so-called nearly-free PC model.
IDC said increased price pressure in both consumer and business markets continue to affect revenue growth and margins. However, the analyst predicts that demand will remain healthy this year, but market conditions will force vendors to improve their business models.
Compaq continued to hang on to its lead in the Emea PC market, but suffered from strong competition and a slowdown in the business market towards the end of the year. The company also regained its number one position in the UK which it had lost to direct rival Dell in the previous quarter.
Dell recorded an overall sustained unit growth, but its performance in the fourth quarter was also affected by the slowdown. However, the success of the Fujitsu/Siemens merger pushed the company back to the number three position in Emea for 1999.
"Last year was an important milestone for the PC industry," said Karen Paoli, Emea PC tracker programme manager for IDC. "Increased demand for Internet access and aggressive pricing in the retail channel will continue to drive consumer sales.
"Business markets will also show sustained growth as companies continue to migrate towards new applications. But players will have to focus more than ever on increasing efficiencies and creating outside the box revenues to remain profitable in tomorrow's consumer and Internet market."
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