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Compaq feels the pinch as buyers postpone spend

Compaq's sales have been hit as businesses in the Europe, Middle East and Africa (EMEA) region put buying new PCs on hold during the first quarter of 2002, according to a new Dataquest report.

Despite this, Compaq retained its number-one position in the EMEA PC market. The US vendor shipped 1.32m units, down 6.1% from last year to give the company a 12.7% market share, Dataquest said in its preliminary review of the EMEA PC market for first three months of 2002.

The review cites Dell Computer as the runner-up with 992,000 units shipped, up 8.4% year-on-year, giving it a 9.7% market share. Hewlett-Packard came in third place with 847,000 units shipped, up 2% from last year, and good for an 8.3% share of the market, according to Dataquest.

The comparison with last year's first quarter is slightly distorted as last year was far from typical. The last three quarters showed an overall decline after a strong first quarter. That strong first quarter is now distorting the figures, Dataquest said.

Dell also felt the effects of the budget squeeze. The company's shipment growth percentage dropped after holding steady in the high teens in the past year. HP was also affected, but to a lesser extent than Compaq, according to Dataquest.

Vendors can breathe more easily now as corporate demand is set to rebound before the end of this year and possibly sooner, Brian Gammage, a principal analyst with Gartner, said.

"Corporates are still not buying, but they will have to come back into the market towards the end of the year because of the replacement cycle. Ongoing price increases might have some effect. Some corporates, if they have a volume order, might bring it forward to get a cost advantage," he said.

Overall, PC shipments in the EMEA region in the quarter rose 2% from last year to a total of 10.23m its. The region continues to move at two speeds, with double-digit growth in Eastern Europe offset by a 4% decline in Western Europe, according to Dataquest.

"In terms of relative performance the dynamic hasn't changed significantly over the last nine months but we are moving back to a market that is moving into a positive growth area. However, it is only an early indicator that we are on the way to a wider recovery in IT spending that we expect to see in the second half of next year," Gammage said.

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