UK notebook market booms

Aggressive pricing for notebooks, fuelled by keen competition among vendors as their margins get squeezed, has resulted in soaring sales

Notebook sales are booming in the UK as vendors and retailers squeeze their profit margins to generate demand.

In its quarterly PC market focus, research group IDC said there has been a noticeable shift in demand for notebooks over desktop systems in both the corporate and consumer markets. Over the past 12 months, overall sales grew 15.7 percent, driven by a strong notebook market, which saw sales rise 41.7 percent.

Ian Gibbs, research analyst for IDC's European Personal Computing group, said demand has been fuelled by aggressive price cutting and intense competition: "Declining prices squeeze margins, and this is something we will continue to see for the rest of the year," he said.

Corporate spending on desktops was virtually flat for the second quarter of 2003 but even so was 17 percent higher than for the corresponding quarter in 2002. Gibbs expects sales to continue rising for the rest of 2003, as more companies perform long-overdue upgrades on desktops and notebooks. "Corporate roll outs are picking up momentum as many large companies are finding that they can no longer realistically stretch the already-prolonged lifecycles of desktops and notebooks, making replacements inevitable," he said.

Although market leader HP showed a healthy growth of almost 20 percent over last year, Dell continued to close the gap, with a 38 percent increase in its sales.

Fujitsu Siemens was the biggest loser, with a 10 percent decline in sales over the past year. IDC blames this decline on the noticeable shift in consumer preference for notebooks instead of desktops.

Dixons and PC World meanwhile played a big part in improving sales for NEC and e-machines. This had a direct effect on mail-order firm Time, which lost 2 percent in its market share.

When compared to last year, Apple desktop sales fell marginally, which was again attributed to weaker demand for desktops over notebooks.