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Currency fluctuations to blame for decline in MEA PC market

pcCurrency fluctuations in a number of the region’s key markets, as well as to the ongoing instability in global oil prices are the causes of poor performance in the PC market within the Middle East and Africa (MEA) PC which suffered a year-on-year decline of 9.6% in Q1 2015, with shipments to the region totaling 4.3 million units.

That’s according to the latest market insights announced today by International Data Corporation (IDC) which showed that portable PC shipments declined 9.4% to 2.7 million units, while desktop shipments fell 10.0% to 1.6 million units.

“Currency fluctuations were one of the main causes of the market’s decline slowdown, with key markets such as Nigeria, Turkey, Egypt, and Algeria all being hit,” says Fouad Charakla, research manager for personal computing, systems, and infrastructure solutions at IDC. “Low oil prices have also had a negative impact on almost all parts of the region, with the extent varying from country to country. Inventory pile-ups from the previous quarter also caused the Turkey market to decline faster year on year, while ongoing political and social unrest in the ‘Rest of Middle East’ sub-region* compounded the decline for MEA as a whole.”

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Once again, the top three vendor positions in the region remained unchanged, with each of the top three vendors experiencing annual growth despite the market’s significant overall decline. HP continued to lead in terms of market share, growing 6.5% year on year, while Lenovo maintained second position with growth of 5.3%. Third-placed Dell’s shipments were up 3.5% over the same period, while fourth-placed Toshiba suffered a considerable downturn of 34.3%. Rounding out the top five, Asus posted a year-on-year decline of 7.2%. It should be noted that the segment of market players to suffer the most were local desktop assemblers, as they faced stiff competition from multinational PC brands and, more importantly, the refurbished PC market in many parts of the region.

For 2015 as a whole, IDC expects the MEA PC market to decline 4.8% year on year to total 17.3 million units. “Aside from currency fluctuations, one of the most significant market inhibitors will be the high PC inventory levels held by the region’s channels,” says Charakla. “While this inhibitor was primarily only felt in Turkey during Q1 2015, the impact is now expected to extend to many other parts of the region, including the UAE and the ‘Rest of Middle East’ sub-region. Additionally, the devaluation of some major international currencies, such as the euro and ruble, will continue to negatively impact PC demand in MEA through reduced international trade and tourism from the affected regions.”

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In the longer run, IDC expects the MEA PC market to remain almost flat between 2015 and 2019. However, there will be a gradual shift in the weight of demand from consumers to the commercial segment as a growing proportion of home users switch from PCs to tablets and smartphones and commercial end users maintain their loyalty towards PCs.

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Susan Mwenesi
Susan Mwenesi
Interested in business, technology and all things startups in Africa!

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