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By Ron Coates, 22 January 2001 13:30

NEWS Sales of PCs in Western Europe were up 7.9 per cent on 1999, at 31.8 million units, according to preliminary figures from UK-based PC market analyst Context. This is less than half of 1999's 17.2 per cent growth on the previous year, indicating an end to the PC bonanza. Jeremy Davies, senior partner at Context, said: "PCs are becoming normal and normal financial constraints are going to apply - they'll be amortised like typewriters over three years or so. "There will have to be a sound business case for purchases; the MHz chase is over for end users. A lot of finance directors are digging their heels in. After paying for Y2K, they're in no mood for an upgrade just to handle Windows 2000," he added. While PC sales may be going off the boil, Context sees 2001 as the year for price wars in the server, laptop and notebook computer markets - particularly as Dell has started its strong push into servers. Consumers are likely to turn their attention to appliances, according to Davies. He said: "I'm not saying that the PC is dead, but when Dixons said sales went up six per cent it was due to DVDs and mobiles. People sent 16 billion SMS messages as compared to only many millions of emails. You can do emails on ONdigital for only £100. Games - people will buy games machines. "People will be turning to appliances instead of upgrading the PC, which can already do most of the things they want quite adequately." This year will be one of significant change for the PC industry, predicts Davies. "We are keeping an eye on key indicators because there are going to be fundamental changes in the market. The old paradigms are changing and a number of new drivers will be coming into play."