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Consumer slump hits European PC sales

Increased demand for notebook computers was a rare bright spot for the European PC business during the first quarter, according to new figures from Gartner.

Increased demand for notebook computers was one of the few bright spots for the European PC business during the first quarter, according to new figures.

Otherwise, the three-month stretch was notable for sluggish purchasing from corporations and a steep drop in consumer demand after the commencement of hostilities in Iraq.

Research firm Gartner, which released preliminary PC shipment figures for the first quarter of the year on Wednesday, said that the sector showed modest growth in Europe, the Middle East and Africa. But the figures are deceptive, according to Gartner analyst Brian Gammage.

"The PC market in EMEA performed slightly above expectations in quarter one, but it masks a sharp decline in consumer demand for PCs during the final weeks, hitting local PC vendors hardest. The slowdown in consumer demand has also been carried into April and will impact the PC market during the second quarter," Gammage said.

Both Gartner and fellow market researcher IDC are expected to release worldwide PC figures later on Thursday.

The period of consumer slowdown corresponds to the war on Iraq, which also affected spending on other types of electronics.

Hewlett-Packard was the largest PC vendor for the quarter, with a 19.3 percent market share, having shipped about 2 million units. However, HP's market share was 3.2 percent lower compared with the same quarter last year.

By contrast, Dell Computer grew by 21.7 percent over the first quarter of 2002, taking 11.2 percent of the market with about 1.2 million units shipped. Gartner said that Dell was the main beneficiary of stronger corporate demand for PCs.

Gartner predicted that PC demand in corporations would remain modest for the rest of the year, topping out at 6 percent or 7 percent.

Laptop computer demand was higher across consumer and enterprise segments, partly due to a new generation of mobile products coming onto the market. Vendors have introduced buyer incentives and cut prices to make way for the new products, Gartner said.

Chipmakers Advanced Micro Devices and Intel have both introduced new generations of mobile processors, with Intel spending $300 million to advertise its Centrino group of laptop chips.

ZDNet UK's Matthew Broersma reported from London.