PC shipments plunge 11.47%

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Sunday, Jul 05, 2009

Dubai: Personal computer shipments across the Gulf fell in the first quarter of this year due to weaker-than-expected desktop sales caused by the global economic slowdown, according to industry experts.

PC shipments (desktops, laptops excluding netbooks) in the first quarter amounted to 874,447 units, an 11.47 per cent decline from 987,789 units during the same period last year. Out of 981,283 units shipped into the region in the first quarter, 199,835 units were desktops, 674,612 notebooks and 106,836 netbooks.

The total value of the sales was $869.63 million (Dh3.2 billion), a drop of 9.57 per cent compared to $961.64 million in the first quarter of last year.

"The positive side during the quarter was the growth in mini notebooks or netbooks. Netbooks contributed 15 per cent of the notebook sales. Some of the growth in the netbook PC market is a function of cannibalisation of entry-level notebook PCs, but the factors which helped propel the mini-note market initially - low ASPs and basic functionality - remain the key forces propelling growth," said Omar Shihab, Research Manager, PCs and Systems, IDC Middle East and Africa.

He said the Gulf has performed better than other regions. The hardware sector has been hit hardest in the IT industry.

The UAE market was the weakest, followed by Kuwait. Saudi Arabia and Egypt performed better than expected; consumer demand has not been affected much in these markets.

In the desktop sector, shipments into the region totalled 199,835 units in the first quarter this year, down 26.84 per cent compared to 273,149 units in the same period last year.

The total sales value of the desktop segment was $141.16 million, a fall of 27.25 per cent compared to $194.05 million in the first quarter of last year.

Kuwait was the worst hit in the desktop sector with a 52 per cent fall, followed by Qatar (43.42 per cent), Bahrain (42.50 per cent), Oman (38 per cent), the UAE (31.98 per cent), and Saudi Arabia (1.37 per cent).

"Before the crisis, desktops sales were coming from enterprise replacements, demand from small- and medium-businesses [SMB] and small government projects. In the first quarter, enterprises delayed their replacements. They can delay it for sometime after that they have to do it. But the replacement period is going to be longer. SMBs are the ones who immediately stopped the purchase during the crisis. They are the ones immediately hit," Shihab said.

In the notebook sector, total shipments into the region were 674,612 units, a decrease of 5.60 per cent compared to 714,640 units during the same period last year.

Qatar was the worst hit with a 32.35 per cent fall, followed by the UAE (18.15 per cent), Oman (15.67 per cent), Kuwait (7.17 per cent) and Bahrain (2.77 per cent).

Saudi Arabia and Qatar were the only markets in this sector to register growth despite the crisis. Qatar registered a whopping 32.35 per cent growth and Saudi Arabia 3.69 per cent.

Oman is the only country in the Gulf where desktop shipments outpaced laptops.

"2008 was a bumper year for the Gulf PC market as netbooks were introduced in the region in August by Asus. Compared to 2007, 2009 will be a better year, but when compared to 2008 this year will be very bad," said Swapna Subramani, associate research analyst, MEA region, IDC.

In the netbook sector, 106,836 units were shipped in to the region. The UAE was the leader in this segment with 48,908 units, followed by Saudi Arabia with 47,650 units and Kuwait (4,584 units).


What vendors say:

Intel

"The UAE is mainly a mobile market with a ratio of 4 to 1 (notebook versus desktop). Everything we've seen so far for the year suggests that we will see a seasonal second half, which is that the second half will be stronger than first half. Technology tends to lead economic cycles, it's a tool for productivity and this is why people buy computers and right now the consumer part of the market is what's driving it in the Gulf. I would expect the business part of the market, which has been very slow, will start to pick up later this year or early next year as businesses reset," Samir Al Schamma, IntelIntel General Manager for the GCC, said.

He said we will continue using our leading manufacturing technology to extend IntelIntel Architecture further into high-end computing as well as into smaller form factor devices requiring lower power. Silicon process, the ubiquity of IA platforms and scale are three strengths IntelIntel possesses that will help IntelIntel continue its leadership. Later in the second half of this year it will be launching the Nehalem family of processors for laptops.

HP

"There are indications that the PC market is nearing the bottom. Overall for the year we should see a slight increase in year-on-year sales," Anil Kumar, General Manager, PSG, HPHP Middle East, said. "This year HPHP will launch a series of thin and ultra-light, full-featured notebooks at attractive prices below $1,000 (Dh3,678)," he said.

Sony

"After a rather slow first quarter, outlook for the second half of the year appears to be encouraging," Dharmendra Lalai, Head of IT Marketing Division, Sony GulfSony Gulf, said.

He said although the performance of netbooks may improve, and their demand might continue to increase, it isn't likely they will replace laptops immediately. The current economic situation has led many customers to be increasingly budget-conscious, but some customers are still willing to purchase premium products. Their purchasing decision is based not only on price but also on features and overall performance. "We will continue to develop new offerings which will either be in line with, or exceed, consumer expectations," he said.

LG Electronics

"We at LGELGE have seen tremendous growth for our product portfolio in the Gulf market and have penetrated very strongly in retail market presence for our whole range. This region is growing at a rapid speed and we are expecting double digit growth in the Gulf market for this year," Felix Baretto, Business Manager - Notebook PC, LG ElectronicsLG Electronics Gulf, said. Regarding Android software, he said LGELGE is known to provide the first-to-market concepts with technology and products. For the time being there is no shift in the direction of changing OS provided in their systems.

"Last year the mini-notebook sales were mere 15-20 per cent contributing to overall sales but this year these numbers can increase in doubling last year figures," he said.

Acer

"The first few months have been tough, but with the correct product in the right channels at the right time, we have managed to satisfy the demand there is in the market. Certainly some regions have been more robust than others and retail seems to be holding up quite nicely. Vendors and all channels are working to remain profitable in a global market that is under pressure and in an industry where ASP's continue to slide," Mark Prosser, Product Marketing Manager, Mobility Products, AcerAcer Computer, said.

"The summer months will certainly be a challenge. AcerAcer will continue to work hard with the product and the channels to attract what demand there is. Although no one has a crystal ball, the sentiment in the market is that as we get closer to Back to School and the winter months the outlook looks to be positive.

For AcerAcer, it will be business as usual. We are a company that is able to adapt to market demand very quickly." He said netbooks have opened a new segment of Mobile user that is showing real good growth. "We remain positive on Mobility and expect to see growth in 2009." AcerAcer has refreshed its netbook lineup with thinner and lighter designs. "This is just the start as we move into the second half of 2009, we will see more products that focus on battery life and form factor without sacrifice in performance."

At the beginning of June, AcerAcer announced that it will launch in the third quarter of 2009 a 10" netbook that uses Android. As of today, they have no final specification, pricing or exact availability in the Gulf.

"The Gulf is experiencing a slowdown in PC sales, but it is getting stable and is forecast to be better later during the year.

Asus

Asus refers to 2009 as an optimistic year for laptop growth," said Eric J.C., Country Product Manager - UAE & GCC, Asus Middle East FZCO, said.

"This year we have phased in the Ultra light U-series Notebook and the Vx5, which is our next generation of Lamborghini notebook series. Apart from these, there have been regular upgrades on all our models of notebooks. As for the netbooks, we have the Sea Shell series of netbooks which have 10.5 hours of battery life meeting the all-day computing needs of the consumers." Regarding the Android platform, he said, "The important element to phase in Android is market demand instead of we need to do or not. "Once the market demand for Android growth, Asus will seriously consider to go into this market."

By Naushad K. Cherrayil, Staff Reporter

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