IBM hit in indirect PC slump

IBM hit in indirect PC slump

The PC market price wars will continue following slow February sales figures, according to channel market analyst Inform.

Indirect sales declined 8 per cent on January figures with IBM the hardest hit of the PC vendors. Unit sales for Big Blue dropped 28 per cent according to Inform. Hewlett-Packard's sales dropped 20 per cent and Compaq dropped 10 per cent.

"With the lack of sales growth so far I expect prices to reduce dramatically in an effort by resellers and manufacturers to encourage spending," said Inform senior research analyst Hakan Alac.

PC server sales were the most effected dropping 15 per cent in February. Desktops fell by 9 per cent and notebooks by 4 per cent.

However, according to Alac, average prices during February did not noticeably decline. The only change was in the price of servers, which dropped 5 per cent.

The lack of product movement will end up costing the channel, he said.

"With inventory levels very high late last year, and the lack of sales to date in 2001, many resellers will be losing money with those buying up big last year being most effected."

Inform believes that most companies will absorb the costs, trading reduced profits for customer retention.

In terms of market share, Compaq remained stable with 20 per cent of indirect sales. IBM moved into the number two position with 17 per cent - down five points on January figures. HP also lost 2 per cent market share to hold a total share of 14 per cent.

Despite a slight decrease in notebook sales, Toshiba gained 1 per cent market share during February, bringing its overall share to 8 per cent.

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