Growth in sales of personal computers in Europe, where vicious competition recently claimed a major corporate victim, slowed further in the second quarter, held back by Germany's dull performance.

Computer buyers will be in an increasingly strong position in the months ahead as manufacturers and retailers scramble for sales, research company CONTEXT said on Monday.

If prices do not drop, consumers can expect more computer power for the same money.

Marginal manufacturers face a desperate fight for survival, according to CONTEXT.

In a survey, it said second-quarter sales in Germany, Europe's biggest market, were hit by consumer unease about job security and increasing taxes.

Two weeks ago German computer retailer Escom AG filed for bankruptcy, engulfed by a fierce price war.

The top four computer manufacturers in the second quarter were all from the United States, according toContext.

COMPAQ Computer Corp retained its market leadership with 12.15 percent, compared with 12.8 percent in the same period last year.

International Business Machines Corp with 9.7 percent versus 9.2 percent and Hewlett-Packard (5.38 percent versus 5.2) remained in second and third spots.

Dell Computer Corp jumped one spot to fourth with 5.22 percent, raising its share from 3.1 percent.

Siemens-Nixdorf was the leading European group, in fifth spot with 4.36 percent.

Apple Computer Inc was a major loser with market share diving to 3.95 percent from 5.6.

CONTEXT said personal computer sales in Europe in the three months ended June 30 were 10.4 percent above their level a year earlier at 3,580,040.

This compares with growth of 13.2 percent in the first quarter, 22.0 percent in the fourth quarter of 1995 and 26 percent for all of last year.

Sales in Germany rose 5.9 percent to 835,000, compared with the same period last year. Sales in Britain, the number two market, jumped 18.4 percent to 741,000, while PC fans swarmed into shops in the Netherlands, where sales rose 26.2 percent to 271,000.

"Consumers are getting more for their money. Prices are decreasing slightly but you are getting much more for your money than a year ago," said CONTEXT senior partner Jeremy Davies in an interview.

"We are seeing extreme competitiveness of the brand name vendors and we will see more of the smaller players suffering as the big names ramp up volumes more and more," he said.

Davies said a feature of the market recently was the success of direct sales companies like Dell and Gateway 2000 Inc .

"These direct sellers get the latest technology and the best prices. They move very quickly," he said.

He reckons that although overall sales prospects are cloudy for the rest of 1996, one thing is certain.

"Some of the smaller brands are going to suffer. Smaller companies that have less than five percent of the market will find even greater pressure," Davies said.

Companies behind Siemens-Nixdorf were Olivetti with 3.96 percent, then Apple, AST with 3.49 percent, Toshiba Corp <6502.T> 3.28 percent and Kaufhof Holding AG's Vobis Microcomputer AG at 3.26 percent.

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