Tablets Killing Africa’s PC Market – IDC Report

The Middle East and Africa (MEA) PC market experienced a significant decline of 14.1 per cent year on year during the first quarter of 2013, according to preliminary results released weekend by International Data Corporation (IDC), the premier global market intelligence and advisory firm for the information technology and telecommunications markets.

The results says a total PC shipments in the MEA region slowed down to 5.3 million units, with desktops declining 18.4 per cent year on year to 2 million units, while notebook shipments declined 11.2 per cent year on year to total 3.3 million units.

Fouad Rafiq Charakla, research manager for PC, systems, and infrastructure solutions at IDC MEA and Turkey said: “With a growing portion of end users opting for tablets to meet their computing needs, the demand for PCs continues to suffer.

Looking at the more mature markets within the region, this trend is extremely visible within the power retail channel, where tablet sales have already exceeded portable PC sales in some power retail outlets.

Meanwhile, in markets where the purchasing power of end users is more restricted, low-cost tablets are cannibalizing the demand for locally assembled desktops.”

Microsoft’s recently launched operating system, Windows 8, which was primarily designed for a touch-enabled interface, has also been unable to spur incremental demand for PCs in the region. “Since adding the touch-screen interface hikes up the price of a PC by a considerable margin, the majority of PCs shipped presently still lack touch-enabled screens,” said Charakla.

“This has had the consequence of preventing the operating system from delivering to end users the user experience it is capable of, thus causing the demand for PCs to slow down.”

Growing competition from tablets has caused all key markets in the Middle East and Africa region to decline year on year, with the exception of Turkey, which attained marginal growth, driven by an aggressive sell-in push from certain vendors, power retail campaigns, and public sector initiatives.

“While the ‘Dubai Shopping Festival 2013’ and the ‘GITEX Shopper’ event of April 2013 positively impacted PC shipments in the UAE, these could not prevent the country’s PC market from experiencing a double-digit decline year on year,” said Charakla.

The shift towards demand for tablets was the key reason for the year-on-year declines in PC shipments seen in both Saudi Arabia and South Africa, while the worsening economic situation in the latter compounded the slowdown of its PC market. Two large PC deals were delivered into the education sectors of Saudi Arabia and Pakistan during the quarter, but these were unable to halt the regional decline.

Meanwhile, in Egypt, political instability continues to negatively affect the economy.

“The country is facing a major credit crisis,” said Victoria Mendes, a research analyst for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey.

“The devaluation of the Egyptian pound resulted in PC prices increasing during the quarter, eventually causing sales and PC shipments into the country to slow down.”

The situation is similarly bleak elsewhere, according to Feras Ibrahim, a research analyst for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey.

“All the smaller Gulf countries experienced a slowdown on PC shipments year on year due to tablet cannibalization and lack of foreign investments,” he said.

“Despite huge ongoing infrastructure-development projects in Qatar, PC shipments into the country declined year on year. Inventory liquidation efforts by market players in Oman prevented the country from accepting high shipments, while Kuwait and Bahrain suffered due to ongoing political and social unrest.”

Despite suffering a sharp year-on-year decline in PC shipments of 28.8 per cent, HP continued to dominate the Middle East and Africa PC market during the first quarter of 2013. Dell also experienced a slowdown in shipments, posting a decline of 12.3 per cent year on year, but it maintained its position at number two.

Lenovo was the only player among the top vendors to experience growth in the region during Q1 2013, growing 44.1 per cent year on year to place third.

A common trait among each of these top vendors is that all three enjoy a stronghold in both the commercial and consumer end-user segments.

Portable PC vendor Toshiba suffered a decline of 5.4per cent year on year, but was able to climb up to fourth position, while Taiwanese vendor Acer saw its PC shipments shrink by 25.5per cent over the same period as it slipped down to the fifth place. The key strengths of both these vendors continue to lie mainly within the consumer segment.