Hewlett-Packard (HP) is expected to make an announcement this month naming the Saudi partner for its PC assembly plant in the kingdom. The facility will, at full capacity, roll out 60,000 to 80,000 units annually.
Full commissioning is expected by June. This will be only the third such PC assembly plant HP is directly associated with - the other two are in Poland and South Africa.
"We have identified the partner and the location, which will be announced in Saudi Arabia, hopefully, before the month end" said Christoph Schell, general manager of HP's personal systems group.
The official declined comment on whether it was a single partner or a consortium which will be confirmed. Initially, four Saudi companies were in the running, but more could have joined during the actual bidding.
There was also no mention of the investments either.
HP will provide the technology transfer, sourcing of components and other features related to the plant. It is believed that HP will not take up an equity in the operating company.
HP's decision to go in for an assembly is to help it gain access into the region's small and medium business (SMB) user market, which has traditionally been the preserve of the local assemblers. It is also expected that some of the assembled PC will be shipped out to the other markets.
Meanwhile, across the Middle East, the U.S. vendor maintained its lead in the PC segment with an average 20 per cent plus share of the total during 2002.
In the fourth quarter, its share was 19.4 per cent, which was primarily caused by a change in the logistics chain. It was also during this period that the full integration of Compaq's operations - particularly back-end related ones - into HP Middle East was completed.
"Apart from Kuwait, where there is an issue of logistics, we have had zero impact elsewhere in the region from the war," said Schell.
In the first two months of this year, the UAE was the biggest market for HP, helped on by solid sales during the Dubai Shopping Festival and wins from some major corporate accounts.
Also, from May 1, there will be changes in the company's branding policies, particularly on the commercial PC line. Under this, HP will be the master brand for all of the commercial PC line, while Compaq's will be limited to that of product family.
However, on the consumer PC side, Compaq will retain its supremacy.
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