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Y2K Fails to Hurt Buoyant European PC Sales

Y2K Fails to Hurt Buoyant European PC Sales

The much-anticipated anxiety over year-2000-related computer problems has failed to dampen growth in the European PC market in the second quarter, Dataquest Inc. said today.

Overall shipments of PCs in Europe in the second quarter grew 20 percent over the same period the previous year, spurred by strong corporate demand, according to Dataquest, the market research arm of Gartner Group Inc.

Out of 6.3 million [M] PC units shipped, 4.9 million went to professional users, Dataquest said in a statement. Europe's home PC market also grew 18.3 percent, with shipments of 1.5 million [M] units.

"Where is the Y2K effect?" asked Howard Seabrook, European PC analyst with Gartner Group in London. Previously, the thinking was that most companies already would have made costly investments in readying their computers for the year 2000, and would not be interested in making large hardware purchases this year. Although industry analysts looked for that trend in both the first and second quarters of the year, what they found both times was a buoyant market, Seabrook said.

Dataquest expects more of the same in the third quarter, as many small and medium-size companies are just starting to fix their computer systems problem. Large companies, many of which have PC leasing arrangements for their desktop computers, also are not skimping on hardware purchases. "If it's time to renew their lease, they renew," Seabrook said.

Dataquest defines PCs as mainly desktop or "desk-side" computers and notebooks. PCs marketed as servers are not included in its analysis.

In the second quarter Germany retained its position as the European country with the largest number of PC shipments, with 1.3 million [M] units. The country's second-quarter growth compared to the second quarter of 1998 was sluggish, however, at only 9.2 percent.

The strongest growth in demand came from the U.K. and France. The U.K. had 1.1 million [M] units shipped, growing 31 percent from last year, and France saw growth of 37 percent, with 868,000 units shipped.

U.K. demand was spurred partly by online trading. In France, large retail outlets such as Carrefour and Auchan began selling computers for the first time, which significantly boosted growth in the home PC market, Seabrook said.

Sales of discount computers are an important component of the German market, and also contributed to the relatively low second-quarter growth there, according to Thomas Reuner, who covers the German market for Dataquest.

The German supermarket chain Aldi AG held one of its semi-annual discount computer sales in the first quarter, rather than in the second quarter as usual, which had an impact on overall sales in Germany. The chain sold some 200,000 units over the course of a few days in the first quarter, Reuner said. Other computer manufacturers in Germany, such as Siemens AG and Fujitsu Ltd., also held promotions timed around the Aldi sale, which has achieved a kind of cult status in Germany.

Among vendors in Europe, Compaq remained the number-one vendor based on units shipped, followed by Dell Computer Corp., IBM Corp., Hewlett-Packard Corp., and Siemens AG. Hewlett Packard and IBM both grew strongly, which Dataquest attributed to aggressive pricing.

Dataquest, a unit of Gartner Group Inc., can be contacted at +1-408-468-8000, and on the Web at http://www.dataquest.com/


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