Dwindling server revenues
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Server revenues in Western Europe fell by 15% in the fourth quarter 2001, contributing to an overall decline of 9% for the year.
Server revenues in Western Europe fell by 15% in the fourth quarter 2001, contributing to an overall decline of 9% for the year. This is despite a rise in the number of server shipments in the region, which grew 6% in 2001, according to figures from market research company Gartner Dataquest. Gartner analysts blame "intense price competition" during the year for dwindling revenues, as vendors slashed prices in order to retain competitive edge during the economic downturn.
Of the larger server vendors, Sun Microsystems experienced the worst fortunes in 2001. Server revenues declined by 30% over the year, as Sun paid the price of an over-dependency on the telecommunications and financial sectors, as well as a product transition to the new UltraSparc III chip architecture at the start of the year. In terms of European server shipments, Sun's market share of shipments for 2001 was 6%, a slight decrease compared to its 8% market share in 2000.
Compaq continues to enjoy the largest market share in terms of server shipments, marginally increasing its slice to 32% in 2001, from 31% in 2000. Although IBM came second in terms of shipments, however, it has the greatest share of revenues in the European server market, accounting for 35% of total sales. Dell achieved 37% year-on-year growth in shipments – by far the best performance in the sector and exceeding the overall market growth rate by a factor of six. In doing so, Dell achieved a market share of 14%, pushing Hewlett-Packard down to fourth place with a market share of 13%.
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