Upbeat in a down market
SA’s vendors expect to buck global declines
LOCAL COMPUTER Vendors Sahara and Mustek (MST) have strategies in place to ensure South African sales buck the global downtrend. International IT research and consulting agency Gartner recently published analysis of last year’s computer sales figures, reporting carnage for most vendors but with odd exceptions, such as Acer and Toshiba, which showed positive growth. International vendor Dell has also conducted its own research into the dynamics governing this market.
Mika Kitagawa, principal analyst at Gartner’s Client Computing Markets group, says: “The United States experienced steeper than expected shipment declines due to the recession. The Europe, Middle East and Africa regions were also affected by the economic slowdown across key countries. Asia/Pacific recorded the worst shipment growth since Gartner started its PC statistics research.”
Gartner says the growth driver for the 2008 Christmas PC sales season was the mini-notebook – “netbook” – segment. With more vendors offering creative sales promotions, the mini-notebook segment outpaced overall mobile PC growth.
Dell’s research agrees with the growth opportunities offered by netbooks. Rob Nunn, marketing manager at Dell South Africa, says: “Our research has also shown that South Africans are extremely positive about the future economically but that a strong focus is being placed on improving operational efficiencies. Mobile is another key area of interest.” Nunn couldn’t confirm when Dell’s Mini 9 netbook can be expected in SA.
Gary Naidoo, deputy MD of South African computer vendor Sahara, says the company will also be focusing on the netbook market segment. “There’s a crunch on IT spend but consumers are looking for good deals. The mobile space is promising as the market moves away from desktop solutions. Sahara has managed to maintain quarter-onquarter growth.”
Sahara also enjoyed success with its marketing activities in major sports in SA. Naidoo says a focus on branding will help Sahara compete with the market depth of international players, such as HP and Lenovo. “Well-established international brands are entrenched in the corporate space but the consumer is now more aware of what’s available, thanks to the Internet. We stand an equal opportunity as an SA vendor based on product offerings.”
Mustek founder and CEO David Kan also differentiates between consumer and corporate with public sector spending. “Fourth quarter sales were slightly down on previous years. The impact was bigger in the consumer and SME sector. But a majority of the market is dominated by corporate and Government and the impact has been smaller on those sectors where budgets are in place and spend is consistent. Those customers also want to have operations run more efficiently and have to introduce new technology to achieve that.
“We’re in our traditional PC quarter: we can see the pipeline. The consumer market will continue to struggle for the first two quarters of 2009 but should recover in the third and fourth, helped along by interest rate cuts.”
Kan says that Mustek has introduced Toshiba’s range of notebooks to its product mix focused on consumers, while in the corporate and public sector Mustek will continue to push its Mecer brand.
He also disagrees the desktop market is a lost cause. “Desktop is here to stay – it’s not going to disappear from the market. If you look at total cost of ownership desktop is still substantially lower than notebook. Notebooks are service-intensive products.”
Kan believes SA brands compete favourably with multinational rivals. “In SA we’re luckier than local brands in the US and Europe because we’re geographically remote. Local players in SA have breathing space due to the complications of logistics for desktop systems, which are more complex than notebooks. That’s why we do OK on desktops. I don’t see that situation changing much because of the physical barriers.
In terms of the general market, Kan expects things to be flat in 2009. “If we do see growth it will be single-digit. But I don’t think the market will go negative.”
Mobile is the market.
Desktops aren’t dead.