East Africa PC Market shrinks in Q1 2013

The Kanyan elections, smartphone usage and gray-market shipments contributed to 6.4 percent decline from year earlier

An increase in smartphone usage, lengthy procurement processes, delayed government payments and the general election in Kenya contributed to a drop in PC shipments to East Africa, according to IDC.

PC shipments in the region for the first quarter declined 6.4 percent year over year to 207,385 units. The five main brands shipped, in order starting with biggest market share, were Samsung, HP, Toshiba, Dell, and Lenovo.

The general election in Kenya affected PC shipments because organizations were not spending on new hardware as they waited for the outcome. After the 2007 general elections, Kenya was engulfed in civil unrest that led to destruction of property.

"Desktop PCs recorded a huge slump in the same period; in Kenya, this can be attributed to the general election, with organizations in education (the major consumer of desktop PCs) being forced to wait for the new government to assume office," said James Mutua, an analyst with IDC East Africa.

As predicted, the new government has promised to provide a million PCs for all children in primary school next year. This decision is expected to increase the number of shipments and increase skills within the market, because the PCs will have to be locally assembled.

"The government is keen on buying locally assembled laptops and this means at least there will be transfer of technology to local people regardless of the vendor who will win that tender; with the transfer of technology to the local people, I believe support and maintenance won't be an issue," added Mutua.

At the same time, the government is pushing for more regions to be connected with electricity as well as the national fiber optic backbone, which will increase the number of people interested in purchasing and using PCs.

Kenya receives 60 percent of the PC shipments in the region, mainly because the PCs are zero-rated for taxes while other markets are affected by high tax rates and a proliferation of second-hand and gray-market PCs.

The Ethiopian PC market is also affected by a shortage of foreign currency and long tendering processes. It is common for tenders to go for two years before bids are awarded.

In Uganda, Mutua said, gray-market PCs are common so shipments passing through official channels are low. This is mainly because of the higher prices offered by the official channels.

"In Tanzania, apart from delayed payment by the government, also lack of skills is said to be hampering growth of ICT in the country especially when it comes to Server and Storage market," Mutua added.

With an increase in affordable smartphones, consumers are able to access simple services online, while the falling cost of tablets both from China and elsewhere has allowed more people to access services, such as email, that were traditionally provided via PC.

Rwanda, Burundi and South Sudan have expanding ICT markets but a lack of affordable connectivity has dampened growth. The three countries are landlocked and regional telecom carriers are yet to lower connectivity costs to the level enjoyed by Kenya and Tanzania.

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