Overseas POS Sales, Linux Potential Growing

Point-of-sale terminal shipments grew about 8 percent in Europe, the Middle East and Africa last year compared with a 5 percent annual increase in 2003, according to a new market share study released this week from the IHL Consulting Group.

U.S. POS shipments increased almost twice as much (15 percent) during the same time period, said IHL President Greg Buzek.

Buzek attributed the increases to two factors. First, industry price wars—especially with Hewlett-Packard Co. and Dell Inc. lowering prices sharply—have substantially lowered the retailer’s total cost of ownership (TCO).

Secondly, the retail industry went on a POS buying spree back in ’98 and ’99, trying to head off potential problems with Y2K and the then-anticipated introduction of the Euro. Those units are starting to get old and need replacement, although many U.S. retailers can milk a POS line for as long as 15 to 20 years.

One negative part of the European POS analysis involves Germany, where POS shipments remain “sluggish thanks to high taxes, a stagnant economy and restrictive shopping hours.”

On the operating system front, Microsoft’s extreme domination of the POS installed base (84 percent of the installed base is using a version of DOS, Windows or CE) may not be translating into units shipped and projections of imminent units to be shipped, Buzek said.

That installed base breaks down to about 35 percent DOS, 25 percent Windows, 24 percent Windows 9X CE, 13 percent IBM 4690, 2 percent Linux and 1 percent “other.”

“The battle is shaping up for the conversion of those DOS terminals,” Buzek said, adding that he projects Linux will control about 15 percent of those shipments by 2008, compared with Linux’s control of about 5 percent of the shipments last year.

Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.

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