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PC price points slide

by Stuart Wilson, Friday 16 May 2008

First quarter 2008 PC unit sales in Western Europe climbed 14.1% year-on-year to 15.2 million
First quarter 2008 PC unit sales in Western Europe climbed 14.1% year-on-year to 15.2 million

The latest PC shipment data from the number crunchers at Gartner has shown first quarter 2008 unit sales in Western Europe climbing 14.1% year-on-year to 15.2 million units. The change in the dollar-euro exchange rate allowed vendors to reduce average selling prices (ASPs) much faster than expected, according to the team at Gartner.

"The decline in pricing helped outweigh any negative influences driven by economic concerns in the first quarter of 2008," said Ranjit Atwal, principal analyst at Gartner. "Whilst the PC market is not immune to an economic downturn continued strong mobile penetration helps to sustain robust growth."

Year-on-year notebook growth in the UK hit 40% in the first quarter of 2008. Total PC shipments in the UK hit 3.1 million units – up 11.2% on 2007. Notebook PCs accounted for 60% of total PC shipments and a whopping 70% of consumer purchases as the notebook comprehensively proved itself as the form factor of choice. Desktop shipments slipped 15% year-on-year.

Dell and HP still boss the UK market accounting for 45% of all PCs sold. Dell has finally made its mark in the retail channel, striking deals to sell through Tesco’s and Dixons. These deals helped Dell triple its consumer notebook unit sales. HP notebook PC sales climbed a massive 70% year-on-year.

Acer’s unit sales – including Packard Bell PCs for the first time after Acer’s recent purchase – slipped slightly. Gartner attributed this to the impact of the merger and a loss of retail shelf space.

"The United Kingdom PC market performed above expectations in the first quarter of 2008. The impact of an economic slowdown and the credit crunch has not affected the PC market yet," said Atwal. "However, there is no doubt that falling sales prices made PCs more attractive than ever."

Over in France, PC shipments hit 2.4 million units in the first quarter of 2008 – up 7.9% year-on-year. The market exceeded expectations according to Gartner, despite weaker demand in the consumer market. Notebooks accounted for 56% of all PC shipments with unit sales up 26.8% compared to a year earlier. Desktop unit sales slipped 9%. The professional market grew 13%, while the consumer market climbed just 3.5%. The consumer segment saw strong growth in notebook PCs with 23%.

“For the first time, Acer PC sales included Packard-Bell shipments and saw Acer gain 4.7 percentage points of market share and significantly reduced the gap with HP despite [a] decline in Packard-Bell PC shipments in the first quarter of 2008,” said Isabelle Durand, principal analyst at Gartner, based in France. Acer remained the leader in the mobile PC segment with 57% growth year-on-year.

HP maintained its leadership despite slight year-on-year decline on desktops. Dell entered the retail market with the Inspiron notebook range, which bolstered its performance this quarter. For the first time Asus made its debut in the top five in France. Asus achieved strong sales with its eee PC and as a result it recorded the highest growth rate in notebook PCs.

“With the average selling price further declining in the mobile PCs market we expect to see increased price aggressiveness in the forthcoming quarters,” Durand concluded.

Finishing off the big three markets in Western Europe, Germany witnessed cautious consumer demand but a robust business market in the first quarter. PC shipments jumped 17.4% to 2.9 million units. Notebook sales soared 40% year-on-year to account for 57% of total units sold. Desktop sales slipped 3.3% year-on-year.

Fujitsu Siemens staged a mini fight back in Germany, regaining some of the market share it had lost in recent times, growing unit sales 19% year-on-year. According to Gartner, Fujitsu Siemens is still lagging behind the growth rates shown by the top ten vendors in the EMEA region.

"Dell has entered the retail space in several other European countries but whether the company can successfully divert from its build-to-order strategy in Germany remains to be seen," said Meike Escherich, principal analyst at Gartner.

Medion ran several Vista promotions in the first quarter of 2007 but didn’t manage to reach the same desktop volumes this year despite exhibiting a 22% growth in the mobile PC segment with extremely low margins.

"The German PC market performed above expectations in the first quarter of 2008. The market was driven once more by strong mobile PC sales. The growth was bolstered by shipments of eee PCs into the German retail market," said Escherich. "Interestingly, for a third quarter in a row, volumes were equally driven by the professional and consumer segments, which could be seen as an indicator for a final pick-up in the professional market where growth had come to a virtual stand-still through 2006 and the first half of 2007. Falling sales prices seemed to counteract any possible worries about a global economic downturn."

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