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Double digit PC growth predicted for EMEA

by Stuart Wilson, Thursday 20 March 2008

The numbercrunchers at research house IDC are painting a rosy picture for the Europe, Middle East and Africa (EMEA) PC market in full year 2008 with unit sales expected to climb 14.4% and surpass the 100 million mark.

Total EMEA PC sales climbed 15.9% in 2007 to a whopping 88 million units, according to IDC. The solid rise in PC sales was attributed to strong notebook demand in Western Europe and the continued expansion of the markets in Central and Eastern Europe (CEE) as well as the Middle East and Africa (MEA). In total, EMEA notebook sales soared 36.4% year-on-year in 2007 with overall PC unit sales climbing 26.7% and 18.4% in CEE and MEA respectively.

Consumer demand for notebooks was particularly strong in 2007 with unit sales up 46% meaning that notebooks overtook desktops for the first time in the EMEA consumer market. In total EMEA consumers snapped up 21 million notebooks in 2007 compared to just 16.5 million desktop PCs.

“IDC expects 2008 to be another buoyant year for the EMEA PC market. Notebooks will remain a key driver across the region and further market commoditisation will fuel a solid 14.4% growth, with total PC sales in EMEA expected to cross the 100 million mark,” said Karine Paoli, associate VP, IDC’s EMEA personal computing group.

“This year will mark further milestones in the PC industry. Vendor competition is not expected to soften, particularly in the retail channel with the entry of Dell and Lenovo and Acer’s consolidation with Gateway and Packard Bell, while the arrival of lower-cost mobile platforms is likely to add further pressure,” she added.

“However, as the market expands and new usage scenarios emerge, 2008 will see the development of increasing user segmentation and branding differentiation, while the convergence, expected to accelerate this year between PC and telco players, will offer new business model and route-to-market opportunities,” Paoli continued.

Eszter Morvay, senior research analyst at IDC’s EMEA PC group, commented: “In Western Europe, renewals, multi-equipment homes, and further portable adoption will help maintain strong notebook momentum, with sales forecast to grow by over 20% in 2008. However, the sustained appeal of notebooks will continue to inhibit the recovery of the desktop market, which is expected to further contract at -2.6% in 2008.”

“Notebook demand in the consumer and SMB segments is expected to remain the key engine of growth in Western Europe. Stimulated by an increasing need for differentiation as the market commoditises, new multibranding strategies in retail will enable vendors to target groups of customers more effectively and to better balance price points by diversifying their offerings based on usage scenarios. Furthermore, the market will continue to see fast technology adoption, allowing vendors, along with design, to differentiate new models,” Morvay added.

The SMB market is also mooted as a strong opportunity for 2008, particularly in Western Europe. IDC reckons that vendors will also benefit from a strong replacement cycle in 2008, helping generate significant desktop volumes and additional growth opportunities in the notebook space.

“CEE and MEA will continue to maintain strong momentum, with PC market growth forecast to reach 20.1% and 20.4% respectively in 2008,” said Stefania Lorenz, research director for systems at IDC CEMA. “With many first-time buyers opting straight for mobile platforms, notebook adoption will remain the key engine of growth in the coming quarters. However, unlike Western Europe, CEE and MEA will also continue to see healthy desktop demand, with customers benefiting from localised offerings and the prevailing cost advantage of notebooks.”

Price erosion will continue in 2008 with average selling prices for notebooks expected to fall a further 12% in 2008. IDC claims that price will remain key to volume sales, ‘particularly in retail, with large notebook promotion deals sold at spot prices.’ Desktop prices are also expected to erode further against a backdrop of intense bidding for large corporate tenders.

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