Abstract
A strong start to the year was followed by a stagnating summer, but overall the
Western European PC market remained positive in 1H06, with unit shipments
increasing by 5.3% year on year. Market dynamism was directly impacted by
slower trends in key economies, such as the U.K. and Germany, while lower PC
penetration rates in Ireland and Iberia continued to assist to double-digit
growth.
Desktop sales recorded a 3.1% decline in 1H06, directly impacted by the ongoing
transition towards mobility in both consumer and SMB markets as well as the
slowdown in corporate refresh activity. Demand levels were further impacted in
2Q06, as the World Cup advertisements diverted consumer attention more towards
consumer electronics and LCD TV products.
The notebook market struggled to maintain the dynamism of previous years, yet
growth remained healthy at 17.8%. Excess inventory had a significant impact on
stronger sales-in levels to the channel, especially in 2Q06, but it also
resulted in heavier price cuts to shift stock. Price declines were further
stimulated by new product introductions as well as the intensifying war between
Intel and AMD regarding dual-core processors.
"According to IDC, unabated notebook demand will continue to drive overall
market growth throughout the forecast period," said Eszter Morvay, research
analyst for IDC' s EMEA Quarterly PC Research Group. "With attractive promotions
in the retail, consumer purchases remain the key engine of growth, contributing
to an overall 20.3% rise in notebook sales for the full year 2006. The
transition towards portable form factors will continue into 2007, stimulated
mainly by renewals in the consumer and SMB segments, with overall notebook
shipments rising by 17.2%."
Desktop trends are expected remain subdued in the short-term and IDC forecasts
the Western European desktop market to record a 2.7% decline for the full year
2006. Following a slow start in 1Q07, desktop demand is expected to pick up,
fuelled by a new rebound in IT investments in the enterprise sector.
In the short term, market dynamics will be driven by household spending.
"Western Europe will be increasingly characterized by replacement demand with
second-time buyers opting for higher-end configurations even at a price
premium. This trend will compensate for the continued price erosion of
entry-level systems, and therefore resulting in the stabilization of overall
ASP levels," said Morvay.
Commercial demand will remain primarily fuelled by increasing notebook adoption
in the SMB space, and to a lesser extent in the corporate sector. Large
organizations will continue to prefer deskbound systems as the main computing
platform, in order to lower their TCO, tighten security and ease manageability
and deployment. A new cycle of corporate refreshes, commencing 2H07, will help
lift business demand levels across all form factors.
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