Wireless truly priceless

Middle East notebook computer sales have again outstripped desktop PCs in 2006, with local consumers seeking products that combine mobility and functionality. Ronan Shields profiles the key notebook vendors vying for market share.

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By  Published  October 31, 2006

Consumer notebook sales are increasing exponentially in the Middle East, with Hewlett Packard proving the most popular brand with a 21.5% share of the market in Q2 2006, according to IDC data.

The recent launch of its entry-level Compaq notebook range and the continuing popularity of its HP Pavilion portfolio has enabled HP to achieve an annual growth rate of 29.6%, according to the company’s category manager for notebooks and handhelds, Vishnu Taimni.

“We aim to cover the whole spectrum of the market while taking different consumer needs into account,” he says. “We have a broad notebook portfolio that caters to every sector, from entry level to high-end corporate.

“We have witnessed consistent growth in entry-level and high-end notebook sales. The entry-level sector is growing as a result of increased consumer demand for cheaper wireless technology.”

Key industry figures note that improving sales of lower cost notebooks has coincided with the increased availability of entry-level products in generic hypermarket- style retail outlets.

“When people switch from desktops to notebooks they tend to go for the entry-level products but we also do well in our high-end products,” notes Taimni.

“We may look to secure deals with new retailers and distributors keen to service the entry-level market in the future.

“Certain products have proven more popular in specific markets – the Presario has achieved strong sales in hypermarket retail outlets while products like the Pavilion series have performed better in more specialised retail stores.”

Taimni claims that price is “not the sole consideration of consumers looking to purchase a notebook”.

“The Pavilion series is a premium notebook range that has very strong brand-equity in the marketplace.

We find that consumers are willing to pay more of a premium because of the look, feel and capabilities of these products,” he says.

Ashish Panjabi, chief operating officer of UAE-based Jacky’s Electronics, confirms that HP and Acer consistently rank as the retailer’s top performing notebook brands.

“This can be attributed to a number of factors,” he says. “Both companies have been investing quite heavily in terms of marketing, and their promotional strategy in the UAE is second to none.”

Panjabi also believes both companies’ customer care programmes play a crucial role in defining their commercial success.

“Comprehensive after-sales service facilities has helped to position both Acer and HP as leaders in the marketplace,” he says.

“The products have always been good but it’s the marketing and service backup that sets both brands apart from their competitors.”

David Drummond, business unit manager of mobile products at Acer, cites technological developments as fuelling this trend.

“Notebook technology has been evolving rapidly, mainly because of improvements in processing power, which has encouraged many consumers to upgrade,” he says. “Notable developments include the introduction of Intel Dual Core Processors and the Celeron 4.10 and 4.30 chips, which all combine low-power, low-heat technology to provide improved performance.Sony
MODEL RANGES: VGN FE, FJ, SZ and TX series.
KEY FEATURES: Intel Core 2 Duo Processors, Windows XP, Wi-Fi, Blu-ray
DVD drive (under development).
MIDDLE EAST DISTRIBUTION PARTNER: Jumbo Electronics.Apple Macintosh
MODEL RANGES: Macbook, Macbook Pro.
KEY FEATURES: Intel Core Duo processors, Front Row multimedia software,
iSight webcam, iLife software suite, Wi-Fi.
MIDDLE EAST DISTRIBUTION PARTNER: ABM.

“Acer’s business strategy has been polarised because it was the first company in the Middle East and Africa to release models with such technology.”
Reflecting on Q2, 2006 – a period in which Acer expanded its market presence by more than 75% in the notebook market – Drummond says the company plans to maintain an aggressive pricing strategy to consolidate its position in the sector.

“Our performance in the first half of the year was supported by the sales of our high-end products. However, sales of our entry-level products have also enjoyed tremendous success in recent months. We plan to continue to pursue an aggressive pricing policy to ensure this success continues,” he says.

Vendors also report that the emerging economies of the Middle East and Africa pose a diverse range of challenges and require more detailed analysis. Ahmed Khalil, the general manager for Toshiba in the Middle East and Africa, notes a disparity in the performance of various products in these markets.

“If you look at the Middle East, notebook sales in the oil-based economies of the GCC have generally exceeded those of desktop PCs,” he explains.

“However, in other countries in the region, such as Egypt and the countries of the Levant, there continues to be a trend towards increased sales of notebooks, despite these products accounting for a smaller number of total PC sales in these markets.”

Khalil says these findings forced the company to review its commercial strategy for the region. “Previously, we employed a universal strategy for the region, but then we decided to adopt a country-specific approach and a market segment-focused approach,” he explains.

“We have established our sales and marketing strategies based on these factors. We have clearly identified a marked segmentation in the market, especially on the notebook side.”

With a divide clearly evident in the market, retailers are stocking products to target specific client groups. “We [Jacky’s] have seen an increasing trend towards sales of more medium-to-high end products this year.

Entry level products appeal to hypermarket customers who we don’t necessarily cater to,” says Punjabi.

“In the Middle East, consumers who bought laptops three or four years ago in most cases were either buying a computer for the first time or as a replacement for their desktop computer. In most cases, their priority was to purchase the cheapest notebook available.

“Now, many customers are seeking higher-specified products because they realise the limitations of the entry- level products.

“Consumers are seeking performance and value. Sometimes it’s worth spending an extra US$50 to ensure a better performing product.”

Notebook vendors have responded to market saturation by offering increased value for money and performance in their products.

The performance of notebook sales in 2006 indicates the success of this strategy, as desktop users embrace Wi-Fi-enabled solutions existing notebook users demand better performance. This increased competition has provided distributors and retailers the opportunity to increase their profit margins, while vendors aim to increase market share, resulting in the sector experiencing a period of unparalleled growth.

“The entry level notebook sector is growing as a result of increased consumer demand for cheaper wireless technology.”

Toshiba
MODEL RANGES: Portégé, Qosmio, Satellite, Satellite Pro and Tecra.
KEY FEATURES: Qosmio – HD DVD drive, Intel Centrino Duo Mobile
technology, 17-inch diagonal widescreen TruBrite display, QosmioEngine
and NVIDIA GeForce Go 7300 high-performance graphics card.
MIDDLE EAST DISTRIBUTION PARTNERS: Al-Futtaim, i2,
Redington.Acer
MODEL RANGES: Aspire, Ferrari, Travelmate.
KEY FEATURES: Choice of Intel and AMD Turion processors, HD DVD
drive, Wi-Fi.
MIDDLE EAST DISTRIBUTION PARTNERS: Aptec, Redington,
Al-masa.HP
MODEL RANGES: Pavilion, Presario.
KEY FEATURES: Pavilion dv9000 –AMD Sempron, Turion or Intel Core
Duo, 2 Duo processor options; HP Imprint Finish, with optional integrated
webcam; NVIDIA GeForce graphics card; Wi-Fi.
MIDDLE EAST DISTRIBUTION PARTNERS: Al-Futtaim, Redington.


Sony

Sony is still struggling to shirk the shadow of the ‘exploding battery’ saga that has seen it endure plenty of hardship in 2006. Ranked eighth in terms of notebook sales in Q2, 2006, its top performing model ranges are currently the SZ and TX series with sizeable contributions from the FE and FJ series models. Equipping its products with features such as a builtin webcam, fingerprint technology and unique software, such as PictureGear, Sony claims the VAIO brand is perfectly positioned to capture increased sales in the consumer notebook market.


Apple

The launch of the company’s Macbook series in May also marked the debut of Intel processors in Apple notebooks – a fact that may account for its absence from Q2’s top-ranking notebook vendors in terms of sales. Apple claims the new Intel technology enables the Macbook to operate at four times the speed of its 12-inch predecessor, and with a width of just one-inch, the notebook clearly wins the battle of the bulge.

Apple remains cagey about sales of the Macbook series since its launch, with a company spokesman claiming the range was performing “very well” despite declining to reveal actual figures. The company has failed to successfully penetrate the Middle East and African markets with its notebook range, attributing this fact to the price-conscious nature of both regions’ consumer markets.


Toshiba

Ranked third in terms of notebook computer sales in the Middle East, Taiwanese giant Toshiba weathered a shaky start to the year to enjoy a strong revival in the second half, maintaining a 16% market share.

Staving off competition from archrival Dell – which trails by more than 6% in terms of comparative market share – the company is reportedly waiting for Hollywood studios and third-party manufacturers to launch compatible hardware and software before it equips its Qosmio line with its new HD DVDR burner, the SD-L902A, in the Middle East and Africa. The summer launch of the Tecra series, with its rotating monitor, digital inking and handwriting recognition specifications, lies at the core of the company’s premium product strategy.


Acer

Acer’s first to market tablet PC notebook – the Travelmate C series – enjoyed the greatest gains in terms of overall sales in the Middle East compared to the company’s top five notebook market rivals in 2006. Its running-mate, the high-profile Ferrari-branded notebook series, boasts an AMD Turion processor and a HD DVD drive in high-end models as well as a five-in-one card reader. Acer’s other big seller in the Middle East is its Aspire 9-series notebook portfolio, which boasts Intel Centrino Duo Mobile technology as standard. The notebook range, which features a host of multimedia entertainment capabilities, secured 17.6% of total consumer notebook sales in the Middle East during the surveyed period, according to IDC figures.


HP

The enduring popularity of HP’s premium Pavilion notebook range helped the company to a 29.6% share of the notebook market in Q2, 2006.

The Pavilion range comes equipped with built-in microphone, high definition widescreen display and webcam as standard, and is designed to appeal to both business users and consumers.

HP reintroduced the Compaq brand to the Middle East earlier this year, pitching its V500 model as an affordable, multimedia entertainment alternative.

The notebook boasts a 100GB hard drive, a 1.6GHz speed processor and 512MB/1024MB of memory as standard. These features have ensured the notebook has proven a hit with consumers and justified HP’s decision to reintroduce the Presario brand.

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