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MS warns of thinner times in European PC market

Is the Redmond revenue train approaching the buffers at last?

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Michel Lacombe, President of Microsoft EMEA, is sounding a cautionary note about PC sales in Europe later this year because of the Y2K issue and the slowness of SMEs to renew equipment (Microsoft's preferred solution because of additional Windows' sales of course). Lacombe sees European PC growth being in the 10-15 per cent range, and is keeping to this downward-revised forecast from January. Lacombe broke ranks by suggesting that Microsoft's last reported quarter (a 38 per cent increase in revenue) might have resulted from additional Y2K spending, which could now dry up. This does not auger well for Microsoft's revenue this calendar year beating last year: perhaps the buffers are in sight? British market researcher Context lowered its forecast to 17 to 20 per cent at the end of January from 20 to 22 per cent. However, in data supplied for the European Information Technology Observatory, IDC predicts that the EU market will grow only by 9.8 per cent from 1998 to 1999. IDC believes that the Western European hardware sector will decline from 5.9 per cent to 5.5 per cent of the IT market vale growth, with software increasing from 12.1 to 12.8 per cent, and services also up around 0.6 per cent. ®

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