The German PC market continued to display positive trends in the first quarter thanks to sustained demand for notebooks due in part to declining price points. Overall shipment growth remained moderate at 4.6%, affected by large inventory levels placed in the channel in 4Q. While IDC expects growth to maintain positive trends for the remainder of the year, the delayed launch of Vista along with the World Cup could constrain demand levels in 2Q and 3Q before returning to higher levels in the final quarter of the year.
Notebook sales will continue to display healthy double-digit trends, as increased business confidence and an anticipated improvement in the economy are fuelled in part by the World Cup. Desktop sales are expected to remain flat and bring growth of overall PC shipments to a modest 6.3% for the year.
"Despite increased business confidence and an anticipated improvement in the economy, moderate sales are expected to continue through 2006," said Michele Zwolinski, research analyst for IDC's European Systems Group. "The impact of the World Cup in Germany, alongside the delay of Microsoft's Vista operating system, could have negative repercussions on the consumer PC market, as attention may be diverted from PC purchases in favor of LCDs, for example plasma TVs. The final quarter of 2006 should, however, show more promising trends, fueled by the Christmas season as well as the VAT increase in January 2007."
Notebooks will continue to drive demand throughout the last three quarters of 2006, with growth at a healthy 14.4%. After a softer 1Q, impacted by high inventory levels in the channel, consumer sales levels will return to stronger double-digit growth. Commercial trends will remain driven by continued desktop replacement trends in the SMB segment and increased notebook penetration in the corporate space. The World Cup and the delayed launch of Microsoft's Vista operating system may impact demand levels, but the final quarter of the year is nevertheless expected to display healthy trends. The Christmas season is anticipated to contribute to a strong fourth quarter, and this year will further benefit from the well-publicized VAT increase scheduled to take effect in January 2007.
The desktop market will remain constrained by limited corporate renewal activity and portable adoption trends in the SMB space. The delayed launch of Vista will not provide the additional boost hoped for in consumer desktop demand in the second half of the year. Renewals in the corporate space were still taking place in 2005, hence another cycle is not likely to occur before 2008. Demand in the consumer space will remain slightly more positive over the period, with an expected slowdown during the summer months and traction for notebooks expected in the Christmas season.
While aggressive pricing will remain a key demand generation weapon and will stimulate sales, the competitive environment is not expected to soften. Fierce competition between all international players and the growing presence of Asian notebook players will also add pressure throughout the next quarters.
Vendor Performance Highlights, 1Q06
· Fujitsu Siemens Computers - retained a solid leadership in the German market but experienced slower than anticipated sales in 1Q06 in the consumer space and suffered from the inventory situation. However, the vendor continued to focus on new product launches and experienced robust growth in the SMB and corporate market, helping to boost the vendor's performance.
· HP - recorded a strong 1Q in the notebook segment due to promotional campaigns and aggressive pricing strategies, which contributed to the vendor's above market growth of 11.6%.
· Dell - initiatives to increase its visibility in the German market are paying off for the international vendor across all segments, with growth in 1Q06 recorded at 24.9%.
· Acer - recorded an overall decline of 5.9% this quarter, caused primarily by strong price competition and an inventory surplus, particularly in the consumer notebook segment.
· Medion - following a disappointing quarter with a decline of over 17%, the regional vendor continues to struggle to remain competitive with international players.
· Toshiba - noted healthier than anticipated trends this quarter, with exceptional growth of 32.1% in the consumer notebook market, assisted by attractive price points.
· Asus and BenQ - Asian vendors Asus and BenQ continue to perform above market, with this trend expected to continue throughout 2006.
For more information on IDC's EMEA Quarterly PC Tracker or other IDC Personal Computing research services, contact Research Director Karine Paoli, +44 (0) 20 8987 7218, or email kpaoli@idc.com. Alternatively, contact your local IDC office.
Notebook sales will continue to display healthy double-digit trends, as increased business confidence and an anticipated improvement in the economy are fuelled in part by the World Cup. Desktop sales are expected to remain flat and bring growth of overall PC shipments to a modest 6.3% for the year.
"Despite increased business confidence and an anticipated improvement in the economy, moderate sales are expected to continue through 2006," said Michele Zwolinski, research analyst for IDC's European Systems Group. "The impact of the World Cup in Germany, alongside the delay of Microsoft's Vista operating system, could have negative repercussions on the consumer PC market, as attention may be diverted from PC purchases in favor of LCDs, for example plasma TVs. The final quarter of 2006 should, however, show more promising trends, fueled by the Christmas season as well as the VAT increase in January 2007."
Notebooks will continue to drive demand throughout the last three quarters of 2006, with growth at a healthy 14.4%. After a softer 1Q, impacted by high inventory levels in the channel, consumer sales levels will return to stronger double-digit growth. Commercial trends will remain driven by continued desktop replacement trends in the SMB segment and increased notebook penetration in the corporate space. The World Cup and the delayed launch of Microsoft's Vista operating system may impact demand levels, but the final quarter of the year is nevertheless expected to display healthy trends. The Christmas season is anticipated to contribute to a strong fourth quarter, and this year will further benefit from the well-publicized VAT increase scheduled to take effect in January 2007.
The desktop market will remain constrained by limited corporate renewal activity and portable adoption trends in the SMB space. The delayed launch of Vista will not provide the additional boost hoped for in consumer desktop demand in the second half of the year. Renewals in the corporate space were still taking place in 2005, hence another cycle is not likely to occur before 2008. Demand in the consumer space will remain slightly more positive over the period, with an expected slowdown during the summer months and traction for notebooks expected in the Christmas season.
While aggressive pricing will remain a key demand generation weapon and will stimulate sales, the competitive environment is not expected to soften. Fierce competition between all international players and the growing presence of Asian notebook players will also add pressure throughout the next quarters.
Vendor Performance Highlights, 1Q06
· Fujitsu Siemens Computers - retained a solid leadership in the German market but experienced slower than anticipated sales in 1Q06 in the consumer space and suffered from the inventory situation. However, the vendor continued to focus on new product launches and experienced robust growth in the SMB and corporate market, helping to boost the vendor's performance.
· HP - recorded a strong 1Q in the notebook segment due to promotional campaigns and aggressive pricing strategies, which contributed to the vendor's above market growth of 11.6%.
· Dell - initiatives to increase its visibility in the German market are paying off for the international vendor across all segments, with growth in 1Q06 recorded at 24.9%.
· Acer - recorded an overall decline of 5.9% this quarter, caused primarily by strong price competition and an inventory surplus, particularly in the consumer notebook segment.
· Medion - following a disappointing quarter with a decline of over 17%, the regional vendor continues to struggle to remain competitive with international players.
· Toshiba - noted healthier than anticipated trends this quarter, with exceptional growth of 32.1% in the consumer notebook market, assisted by attractive price points.
· Asus and BenQ - Asian vendors Asus and BenQ continue to perform above market, with this trend expected to continue throughout 2006.
For more information on IDC's EMEA Quarterly PC Tracker or other IDC Personal Computing research services, contact Research Director Karine Paoli, +44 (0) 20 8987 7218, or email kpaoli@idc.com. Alternatively, contact your local IDC office.
