Healthy Christmas Demand Drives a Strong Year-End Growth of 14.4% for EMEA PC Sales in 4Q07, Says IDC

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The final quarter of the year saw continued strength in the EMEA PC market. Supported by strong Christmas demand and active vendor marketing across consumer and business channels, PC shipments in EMEA recorded a healthy 14.4% increase in the fourth quarter compared with the same period in the previous year, according to preliminary data released today by IDC EMEA. Notebook sales continued to drive volume with growth at over 30% year on year, while desktop sales remained flat.

A strong year end brought total EMEA PC shipments to over 88 million units across the region for 2007, representing a solid 15.8% increase over 2006.

Notebook sales remained strong across the region over the quarter, assisted by intense marketing activity, several product launches, and an increasingly attractive product portfolio, which continues to drive consumer and SMB demand. Supported by strong "sales out" in the retail and business channels, notebook shipments maintained solid double-digit growth in Western Europe. Continued market expansion in Central Eastern Europe and Middle East and African countries drove notebook sales growth in excess of 50% year on year.

"While the back-to-school season was mostly geared towards students, with aggressively priced lower-end offerings, the Christmas season was marked by increasing demand for family PCs, allowing vendors to up-sell to solid mainstream specs at slightly higher prices," said Eszter Morvay, senior research analyst for IDC's EMEA PC tracker. "Although ASPs continued to decline at an overall market level, several vendors managed to ease the erosion versus last quarter, hence achieving healthier profit levels."

With a continued shift in demand evident in the consumer space and SMB market, desktop sales remained constrained, recording a moderate 0.4% increase across the region. Growth was further eroded in Western Europe, despite hopes of a return to slightly more positive trends in 4Q. Volumes remained primarily driven by strong corporate refresh activity, despite slow Vista adoption, while market expansion continued to assist positive growth levels in CEE and MEA regions.

"The CEMA region continued to report very healthy growth levels thanks to the push in the consumer space," said Stefania Lorenz, research director for Systems, IDC CEMA. "In the consumer segment, Christmas sales and unabated price slashing meant notebooks flew of the shelves, while SMBs, corporations, and the public sector continued to invest in mobility. In some of the more mature markets of the region, PC renewals are taking place, keeping the revenue coming."

"2007 marked a clear expansion of the notebook market across the region both from a customer adoption and offering perspectives, and the constitution of a large consumer and business portable installed base will offer a solid base for continued PC market growth over the coming years," said Karine Paoli, director for IDC's EMEA PC group. "2008 will benefit from continued growth in the portable space and from an acceleration of the business refresh cycle. However, as the market further commoditizes, the industry faces increasing business model and marketing challenges, and market share concentration among a smaller number of players, already evident this quarter, is likely to continue."

Vendor Highlights

HP continued to record solid performance and drive share consolidation across all segments, reinforcing its leadership in EMEA with shipment growth of 24% in the final quarter of the year and a share of over 19%. The vendor maintained a solid position in the consumer space in both the notebook and the desktop spaces, while effective strategy in the business market continue to drive strong commercial performance too.

Acer recorded a healthy Christmas quarter and reinforced its second position in EMEA. The vendor continued to drive a very active product and marketing strategy across both retail and SMB channels. While the acquisition of Gateway has not yet had a major impact in Europe due to the limited presence of Gateway in the region, 1Q08 will see a larger share consolidation impact with the related acquisition of Packard Bell.

Dell maintained third place and positive growth, but faced increasing competition from HP in the commercial desktop space and continued to suffer from limited consumer reach. However, the vendor continued to post robust growth in the commercial notebook market and engaged a major strategic transition this quarter with the announcement of retail distribution with Carrefour and DSG in particular, which marks a major turn in the vendor's consumer strategy transition and rollout.

Fujitsu-Siemens returned to a softer performance after a healthy rebound in 3Q, affected by declining consumer desktop sales across several countries outside Germany and supply constraints in the notebook space. However, performance remained strong in the commercial notebook space, where the vendor fared well against competition and continued to gain share thanks to a solid product line up.

Toshiba maintained robust growth and fifth position in the overall EMEA ranking, driven by strong consumer notebook sales and particularly outstanding performances in the U.K. and France among the largest markets. However, the notebook vendor suffered from allocation constraints during the quarter, which affected its commercial performance and limited growth in this segment to softer double-digit figures.

Outlining the strength of the notebook market, Asus, Lenovo, and Sony all displayed very healthy portable sales growth and continued to gain share in the region.

Shipments are branded shipments for all form factors (including desktop and notebooks) and exclude x86 servers as well as OEM sales for all vendors. Data for all vendors is reported for calendar periods.

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 Alternatively, contact your local IDC office.
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