European PC sales drop by 18 per cent as spending flatlines


European PC sales drop by 18 per cent as spending flatlines

Simon Quicke

Hopes that the recovery in the PC market that was seen towards the end of last year would continue through to 2011 have been dashed after consumer spending ground to a halt.

A decline across Western Europe in PC sales saw the UK producing the steepest dip in sales but across the board the hopes of a busy fourth quarter came back to haunt the industry.

Gartner figures showed a 17.8% decline in sales, 14.7m units across Western Europe, for the first quarter compared to the same period last year and excess inventory has been a major factor in exacerbating a pause in consumer and business spending.

The decline in spending is cause for concern because the market had been recovering over the last two years and this reversal against a backdrop of spending cuts and ongoing problems in the Eurozone comes at a difficult time.

"The PC market in Western Europe had not exhibited a decline since the second quarter of 2009," said Meike Escherich, principal analyst at Gartner.

"This quarter's poor performance was due to excess inventory accumulated at the end of the fourth quarter of 2010 in many countries in Western Europe. The excess inventory was reduced only slightly, as demand came to a standstill," she said.

The business market saw continued uncertainty and spending on PCs from that market declined by 8% year-on-year. Escherich said that the "weak economic environment continues to discourage PC spending".

But the major drop was in the consumer space where not only are users extending their refresh cycles but the traditional PC market is being cannibalized by increased sales of tablets, which led to a 25% decline compared to Q1 2010.

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