Europe tops world in PC growth

Price competition and the strong euro have helped revive Europe's demand for PCs, with portable computing continuing to boom, says IDC

Europe was the world's fastest-growing PC market in terms of units for the fourth quarter of last year; growth was driven by price cuts, a gradual renewal in spending by businesses and the strength of the euro, according to research published by IDC on Thursday.

As in the rest of the world, HP led the European market by a significant margin, with 25 percent growth for the quarter compared with the same quarter a year ago. HP was followed by Dell, with growth of more than 25 percent across all form factors and increasing market share, and Fujitsu Siemens in a strong third place.

A continued boom in the notebook market was the main driver of growth during the Christmas period, with consumers and small- to medium-sized businesses showing the strongest demand in response to price cuts by vendors. Enterprises are also spending more on portables, though they are still bound by a cautious attitude, IDC said.

Component and display shortages, and increasing component costs for notebooks, were a concern for vendors through the quarter, but did not disrupt most vendors' ability to fulfil orders, IDC said. Notebook sales hit 40 percent growth compared with Q4 2002.

Desktop sales showed healthy growth of more than 10 percent year-on-year, driven by a rebound in business demand, the end of the fiscal year for many companies and healthy demand in government and education.

Across all categories, Western Europe grew by 17 percent, while the region encompassing Central Eastern Europe, the Middle East and Africa was higher at 20 percent year-on-year. The region as a whole grew by 18.8 percent compared with the same quarter the previous year.

The strength of the euro made it less painful for companies to cut prices, but low prices still mean that vendors' revenues are being squeezed. In 2000, 140.2 million PCs left factories worldwide and accounted for an estimated $226bn (£124bn) in value, or revenue, in the market, according to IDC. In 2003, a record 152.6 million PCs were shipped worldwide, but they carried an estimated value of $175bn -- a $51bn decline.

IDC predicts the strong demand will continue this year, still driven by low prices, which will make life difficult for PC vendors. "Demand is expected to remain sustained in the consumer and SMB (small and medium-sized business) markets, and 2004 will also be lifted by the long-awaited corporate refresh cycles," said IDC research director Karine Paoli in a statement.

Worldwide, PC shipments grew 12 percent to 15 percent in the fourth quarter and about 11 percent for 2003 as a whole, according to, respectively, Gartner and IDC; substantially more than predictions from a year ago. In 2004, shipments are expected to grow 10.9 percent worldwide according to Gartner, and 11.4 percent according to IDC. (Both firms count notebooks, desktops and servers with x86 chips, but their methodologies slightly differ, accounting for the variation.)

CNET News.com's Michael Kannellos contributed to this report.

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