PC makers looking for good news won't find any in Europe, a retail-market researcher said on Tuesday. England-based Context said that preliminary retail data show a marked decline in PC sales in August and September, with the third quarter overall down 9.3 percent compared with the same period a year ago. The figures show a situation similar to that in the United States a year ago, hinting that fourth-quarter sales in Europe could be much worse still. Typically, PC sales pick up in September and October, both in Europe and the United States. Last October in the United States, PC sales collapsed as a sagging economy and saturated market for PCs sapped holiday sales. A year later, the malaise may be moving to Europe, Context concluded. Year-over-year PC sales declined 12 percent in August and 14.6 percent in September. In addition, PC sales dropped 13 percent from July to August, compared with a 2.6 percent increase a year earlier. "July to August going down 13 percent, that's weird," Context analyst Jeremy Davies said. "If you look at all the indicators -- year on year and sequential -- the outlook is grim indeed." From August to September, PC sales in Europe rose 10 percent -- half the sequential growth from a year earlier. "That is extraordinarily bad news," Davies said. "September is usually the month you get the bounce back, which helps to get people's third quarters up. Basically that bounce back hasn't happened." Based on market researcher IDC's preliminary data, IDC analyst Roger Kay said that the situation in Europe "certainly does sound plausible to me. Europe has been washing out the last couple of months. For third quarter, we're looking at a double-digit decline year on year." Davies cautioned that his company's data is preliminary, but only because it doesn't represent a full accounting of stores. Unlike market researchers Gartner and IDC, which track shipments from PC manufacturers to dealers, Context tracks actual sales. This is easier to do in Europe than the United States. That's because dealers account for more than 70 percent of sales in Europe and direct seller Dell Computer is not as large a player in Europe as it is in the United States. Context based its preliminary data on actual sales data from three European countries, which account for about 60 percent of the continent's PC sales. "It's bad enough with the economy. It's bad enough with the state of the industry. But on top of that, you have the HP-Compaq merger and what happened on 11 September," Davies said. He added that the sales malaise had started well in advance of the 11 September terrorist attacks in the United States, which thus cannot be regarded a significant long-term factor. Still, the outlook for fourth quarter is not good, which could further worsen problems for US PC makers looking to Europe for signs of sales strength. "Our projections are that (the third quarter) is really, really bad, and we don't see things getting much better (in the fourth quarter)," Davies said. "All this business about XP and Pentium 4: Forget it; it's not going to happen," he said, referring to a possible sales revival related to the release of Microsoft's Windows XP operating system and Intel's release of faster chips. The situation in the United States is much worse and has declined dramatically since the sales collapse started in the third quarter of 2000. IDC estimates that PC shipments in the United States will decline 18 percent in the third quarter year over year. Consumer PC sales specifically are expected to plummet a whopping 36 percent in the third quarter year over year and 31 percent in the fourth quarter year over year. Even with XP's official launch coming next week, Kay described the fourth quarter "more like a frozen wasteland than a tidy yuletide fire." See the Hardware News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.