UK sales have failed to live up to expectations for Fujitsu Siemens Computers' first post-merger business quarter. Like many PC vendors, it saw a freeze in corporate spending for the last three months of the year as managers were too scared of Y2K to buy kit. In contrast to healthy European PC sales, which grew 20 per cent, the UK was hit by "unfavourable market conditions in the corporate segment", the vendor told journalists in Frankfurt yesterday. "Concerns over the possible impact of the millennium bug froze major roll outs, adversely affecting the comparison with Q4 98," it said. Servers, notebooks and workstations "saw some growth", though no figures were available. The rest of Europe fared better, with the Netherlands -- the newly formed company's HQ -- seeing a rise of more than 200 per cent in PC sales, and 12.2 per cent in servers. This compared to 23 per cent and 45 per cent in Germany, and 80 per cent and 23 per cent in Spain respectively. The total European server business grew at more than 33 per cent. In all, the company sold more than 1.1 million computers -- putting Fujitsu Siemens' total growth rate at 20 per cent for the last three months of 1999. Alan Norman, UK marketing communications manager for the company, said the suspension on PC spending had affected most IT vendors in the UK -- not just Fujitsu Siemens. "But activity is picking up in all segments now we are into 2000 -- especially on the corporate side," he added. "I believe Q4 will have strengthened our position in Europe and move us nearer to Compaq." Yesterday, IBM CEO Louis Gerstner admitted Big Blue had been hit hard by the Y2K bug in the fourth quarter. And last October, Action lost its proposed buy-out deal from US giant Insight Enterprises due to the bug eating into corporate PC spending. Andy Brown, IDC research analyst, said: "The general feeling is that slowdown due to Y2K in Q4 wasn't as bad as predicted -- although it did hit some of the larger vendors. "But we are expecting this just to be a glitch, and for spending to pick up again." Fujitsu Siemens also announced a stack of new desktop products, including two business PC ranges and its first "Easy PC" -- using the AMD EasyNow platform and with the unlikely name of Celvin. The products will be previewed next month at CeBIT. ® Related Stories Fujitsu Siemens launches first post-merger notebooks Fujitsu Siemens sign on the dotted line