Inventory issues cause concern in EMEA channel

HP took the top spot in the second quarter Europe, Middle East and Africa (EMEA) PC shipment rankings according to the analyst team over at Gartner. HP landed 16.4% market share, shipping 2.73m units during the quarter, but overall channel inventory issues continue to loom large in the EMEA market.

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By  Stuart Wilson Published  July 23, 2006

HP took the top spot in the second quarter Europe, Middle East and Africa (EMEA) PC shipment rankings according to the analyst team over at Gartner. HP landed 16.4% market share, shipping 2.73m units during the quarter, but overall channel inventory issues continue to loom large in the EMEA market. In total, EMEA shipments climbed 7% year-on-year but concerns remain about the build-up of inventory in the regional channel. According to Gartner, CPU inventory clearance by Intel on a global scale, and more aggressive pricing by both Intel and AMD attributed to lower prices in the quarter. While the CPU price cuts helped to boost shipments in the US and Asia-Pacific regions, shipments in EMEA were adversely affected because there remains higher that normal finished goods inventory. Total EMEA shipments in the second quarter hit 16.7 million units, including desktops, notebooks and x86 servers. The star performers in the EMEA theatre were third placed Acer and fifth placed Toshiba with both vendors recording sparkling year-on-year growth rates. Acer boosted unit shipments 22% to 1.63 million units while Toshiba’s numbers climbed 38.9% to 670,000 units. Dell took second spot recording EMEA unit shipments up 11.5% at 2.19 million. Fujitsu Siemens’ EMEA unit shipments climbed a disappointing 0.9% to 1.09 million units. “For the first time since the first quarter of 2003, the region experienced a single digit growth,” said Ranjit Atwal, principal analyst for Gartner’s computing platform group in EMEA. “The vendors seemed in denial of this cyclical downward trend and few had enough flexibility in their business models to adequately adjust to rapid market dynamics change.” According to Gartner the slower growth in EMEA was exaggerated by vendors and channel partners attempting to reduce high PC inventory positions as well as working to ensure restriction of hazardous substances (RoHS) recycling directive compliance. Gartner also claims that the inventory build-up in the distribution channels had been apparent for a year but neither the vendors nor the distributors took enough action to deal with the problem, leaving the vendors with difficulties shifting inventory in a weaker market.

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