PC market may fall 10% in this quarter

Consumer demand will decline faster than commercial and VAT has increased cost for end users, analyst says

The PC market in the UAE is expected to fall around 10 per cent year on year in the third quarter of 2018, due to cannibalisation by smartphones.

“The primary reason for this decline is the growing usage of smartphones, which continues to cannibalise demand for PCs. Additionally, a large scale education project — which was held during the third quarter of last year — was delivered during the second quarter of this year, resulting in fewer shipments for the third quarter,” said Fouad R. Charakla, senior research manager at International Data Corporation (IDC).

As per IDC stats, the third quarter shipments are expected to be 335,845 units, compared to 372,974 a year ago.

Charakla said that Gitex will be a driver for PC sales but it is not likely to be significant, as a result of overall slowdown in consumer demand due to value-added tax (VAT) and with most people increasingly using smartphones over computers.

He said consumer demand for PCs will decline faster than commercial in the third quarter. VAT has increased the cost for end users and they focus more on priorities. “Disposable income has slightly reduced and cost of products has gone up by 5 per cent,” Charakla said.

Laptops in, tabs out

As for Macs, he said there haven’t been any exciting improvements but in Windows, innovations have been happening. “Windows 10 as an OS is getting a lot better and moving across devices is a lot easier,” he said.

Mohammad Hilili, general manager for Lenovo Gulf, Saudi Arabia and East Africa, said the market has increased seven per cent year-on-year in the second quarter, but there was a decline of 17 per cent in the consumer space and an increase in the commercial sector.

“The average selling price of PCs has increased and this is not due to VAT but because of more laptop and gaming machines sold. The fall in consumer space is compensated by the higher selling price,” he said.

For the year, Charakla expects the market to decline by 7.6 per cent. Meanwhile, the tablet segment is falling quarter on quarter due to cannibalisation by smartphones, he said. In the third quarter, the UAE market is expected to see a year-onyear fall of around 25 per cent to 230,517 units, compared to 305,687 units a year ago.

“The significant requirement for tablets is fading away; people are satisfied with either a laptop or smartphone. For the year, the tab market is expected to decline by 23 per cent,” Charakla said.