Europe drives PC sales growth

Compaq rises masks poor US performance, IDC says

Champagne corks will be popping in PC sales departments this festive season, so says yesterday's IDC report predicting a 12 percent volume boost from October to December. European sales is the driving force behind this demand, with worldwide volume expanding 11 per cent to 89 million for the entire year. Vigorous growth for 1999 was also featured, with unit volume expected to reach 101 million. The growth stems from budget consumer PCs, new retail channels and the explosive rise in Internet users, and is led in Europe by Germany. The US forecast increase is 12 per cent this year, and even sales in suffering Asia have a projected growth rate of 5 per cent in the fourth quarter. The report names Compaq as the top worldwide PC vendor, followed by Dell, IBM and Hewlett-Packard. It predicts Compaq will increase shipments 5.7 per cent worldwide, but will "lose 8.4 per cent in the US in 1998". Meanwhile, Dell's sales are expected to jump 67 per cent for the year. George O'Connor, research analyst at investment bank Granville Davis, said: "Although it is good that revenues are up and more business is flowing through the industry, it will be at the expense of lower margins. This pressure will be acute in the second half of next year, when end-users will be reluctant to buy computer products."®