Business PC Sales Fall 25% in Britain

UK sales of professional desktop and mobile PCs fell in the second quarter by more than 25 per cent compared with the same period last year, according to analysts at Gartner (IT).

Consumer PC sales across Europe would have dropped much more sharply were it not for the sudden popularity of netbooks, the analyst firm said in a report published on Thursday. Overall, the fall in sales of all PCs in all market sectors in the UK was 6.5 per cent.

Gartner principal analyst Ranjit Atwal said in a statement: "This quarter was highlighted by the level of decline across both desk-based and mobile PC platforms, with a quarter of the [professional] market disappearing."

Atwal told sister site ZDNet UK that the major reason for the decline in business PC sales was the cutting of business budgets.

"As business budgets have been cut, the first thing on their agenda that gets delayed is hardware," Atwal said. "There is a fundamental understanding that you can keep your PC for longer and it won't have that much effect on the productivity of users.

"Businesses are saying 'we're going to sweat our assets' but eventually they will have to replace their PCs."

The wait for Windows 7 – scheduled for release on 22 October – probably had an added effect on business PC sales in the second quarter, Atwal said, particularly for organisations that are still on Windows XP and avoided Vista.

"Those organisations now have a clear goal that they will migrate from XP to Windows 7 with new PCs," he said. "Normally when [you upgrade PCs and operating systems] you do it with a phased approach. We are more likely in 2010 to see a forklift upgrade, where they would have to migrate all or most of an organisation to the next OS [at once]."

Atwal added that some organisations may have planned to move to Vista during 2009 but this did not happen due to budget cuts that delayed PC purchases.

The UK PC market will not recover from the impact of the recession until next year, Gartner predicted.

Atwal said that in Western Europe, the "netbook effect", driven by low prices for subnotebooks, saved PC sales from a 15 per cent year-on-year decline. In the event, the drop was only 3.3 per cent.

"If you take the netbooks out, the consumer market is pretty weak in western Europe," he said. "A lot of consumers still want to buy PCs and netbooks have probably come into the market at the right time for the economic situation."

Although netbooks are in most cases a user's second machine, many consumers buy them as their primary PCs, Atwal said. He noted that many people understand they may not need the horsepower of a fully-fledged PC unless they intend to create content, and they may be satisfied with the web-viewing capabilities of netbooks.

The top three PC manufacturers in the UK during the second quarter were, in descending order, Dell (DELL), Acer and HP (HPQ). Acer saw 32.6 per cent year-on-year growth but Dell's sales fell by six per cent over the same period, and HP's fell by 25.1 per cent.

"Acer have done exceptionally well across Europe on the back of a lot of netbook purchases," Atwal said. "HP is now out of the top two in the UK, but they are going through internal reorganisations, which is not helping their ability to view the tactical side of the market at the moment.

"Dell, from a business perspective, are finding it very difficult. They are trying to drive their consumer business but [their efforts] are not sufficient to weather the downside on the professional side."

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