Economic slowdown slashes PCD shipment

Latest insights from the International Data Corporation (IDC) have shown a decline of -8.8 per cent year-on-year in Q1 2017 in the shipment of personal computing devices (PCD) for Middle East, and Africa (MEA) region.

The global technology research and consulting firm’s Quarterly Personal Computing Devices Tracker for Q1 2017, showed that PCD shipments fell to around six million units, the lowest levels recorded since Q4 2011.

The market’s slump was primarily rooted in the fall in the demand for traditional desktops and slate tablets, with shipments of these devices suffering year-on-year declines of 25.3 per cent and 16.9 per cent, respectively. Detachable tablets, on the other hand, experienced incredible growth of 102.5 per cent over the same period, albeit coming from a smaller base. Notebook shipments were also up in Q1 2017, with units increasing 5.9 per cent year on year.

Senior Research Manager, Client Devices at IDC MEA, Fouad Charakla, said the overall economic slowdown in most parts of the region has been a key inhibitor to the PCD market’s performance, as it has led to slower business activity and negatively impacted consumer sentiment.

“At the same time, the demand for slate tablets continues to be cannibalised by the increasing shift among home users to the use of smartphones for tasks previously performed on tablets.

“Demand for desktops has been the worst hit, with the on-going transition towards notebooks, detachable tablets, and refurbished devices all having an impact to varying degrees across the region’s key markets, while the overall slowdown in PCD demand is further exacerbating the issue.

“One bright spark amidst the negativity is that youth IT education remains a major driver of PCD demand in the region. Indeed, deliveries for a massive education project in Kenya continued in Q1 2017, and served as the biggest driver of detachable tablet shipments in the region. Additionally, large-scale volumes of notebooks were delivered into the education sectors of Pakistan and Kenya during the quarter, helping to spur growth in this segment.”

Already, the research firm had in April disclosed that shipments of ‘official’ PC to Nigeria fell 57.1 per cent year-on-year in 2016 to total 156,511 units.According to IDC, the market has fallen to its lowest levels since it started tracking from the first quarter (Q1) 2008. Factors such as unstable exchange rates, poor economic performance, and steady rise in refurbished grey market imports caused a decline that has been on-going since 2013 in Nigeria.

A Senior Research Analyst at IDC West Africa, Babatunde Afolayan, said: “Nigeria’s currency – the Naira, has been losing considerable value against the U.S. dollar for a number of years now. To make matters worse, the government excluded IT products from accessing foreign currencies at the interbank rate, pushing channel partners to obtain foreign currencies from the unofficial market, where rates are typically 40 to 50 per cent higher.”

While IDC expects education to remain a strong contributor of PCD demand, however, IDC’s forecast data only incorporates deals that have a very strong likelihood of materialising and for which the quantity and timing is already known. As such, the longer-term growth potential for education demand in 2018 and beyond is not fully reflected in the forecast.

Looking at the PC vendor rankings for Q1 2017, all of the top five vendors maintained their positions when compared to the previous quarter. They all experienced slow year-on-year growth in terms of market share, with the exception of Acer, which suffered a drastic decline in shipments as a result of a significant slowdown in Turkey and several parts of Africa.

Meanwhile, over in the tablet space, Samsung continued to lead in terms of market share in Q1 2017, while Apple and Huawei climbed up into second and third positions, respectively. The top five vendor rankings for the quarter were rounded out by Lenovo and UAE-based vendor i-Life.