IT vendors lower price as GITEX makes a hit

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By  Published  November 26, 2006

Computer vendors have broken an unimaginable barrier this year with several laptop models on offer for under US$545.

The steady and progressive fall in component prices coupled with the aggressive Gulf Information Technology Exhibition (GITEX) pricing campaigns in recent times have enabled computer makers to reduce prices to levels that were previously thought unattainable. GITEX 2006 is the largest information technology fair in the Middle East.

Fujitsu first broke the sub-US$545 barrier early in 2006 during a technology fair in Saudi Arabia, as part of its strategy to offer the most competitively priced computers during expos like GITEX.

“Everybody waits for GITEX to come around,” said Maria Sorger, marketing operations manager for Fujitsu Siemens Middle East. “People wait to get a good deal, and that is the market where you fill that need.”

Fujitsu-Siemens’ most affordable notebook, the Amilo Pro V2055, comes in at US$408 under a GITEX-only limited offer and component configuration. Acer also offers a competitively priced laptop priced during GITEX. Its Acer Aspire 3682WXCi, at US$517, is priced slightly higher than the Fujitsu-Siemens model and comes with a few added features including Windows XP home edition.

Graham Braum, Acer’s product marketing manager for mobility products, said the recent price drops have arisen from increased demand and technological innovation.

“In last two years in particular, we’ve seen a lot of component decreases from a lot of manufacturers,” said Braum. Demand is being created mostly by the consumer and also from the small to mid-sized business segment and the small office, home office (SOHO) group.

Emirates Computers’ president Hani Harik who has attended all 26 shows hailed this year’s GITEX as the best ever. “There is a better quality of people this year and even the exhibitors have improved the quality of their stands to take things to a much higher level.” Emirates Computers is a big partner of brands such as Dell, Cisco and Citrix and their stand this year focused on smart living and convergence to illustrate the way that technology is being adopted by all types of users.

Indeed, the growing importance of GITEX Shopper & Consumer Electronics Expo and its impact on the traditionally IT-focused event that is GITEX Dubai is a by-product of the increased convergence of IT and consumer electronics technologies. The increased development of new consumer electronics products featuring traditional IT networking components, such as Wi-Fi, is creating a host of new commercial opportunities for companies involved in both sectors. Simultaneously, it is also blurring the once-clear distinction between IT and consumer electronics products, which is fuelling increased competition in various product categories.

A good illustration of this is the MP3 player market, which is dominated by traditional consumer PC vendor Apple. However, over the past 12 months, Apple has faced increased competition from consumer electronics companies such as Sony and Samsung, and minor threats from IT peripherals manufacturers including Creative and iRiver. Meanwhile, Microsoft’s decision to include Wi-Fi connectivity to their recently released Zune portable media player means that users will be able to share music with other Zune players wirelessly.

Greater cooperation between traditional IT and consumer electronics companies in the development of new products is being spurred further by growing consumer demand for ‘intelligent’ white goods. Much of this growth has been attributed to the rapid spread of wireless broadband networks in developed markets, which has had a knock-on effect on consumer demand for Wi-Fi-enabled electronics devices.

Consequently, household appliances are being radically recast. The development of home networking technologies has enabled many household appliances to be linked via a server to provide access to a range of automated facilities.

Market analyst In-Stat recently predicted that the home networking market will be more than double in value over the next three years to US$17bn. Rival analyst ABI Research predicts that annual shipments of Wi-Fi-enabled products will rise from just 40 million this year to 249 million in 2011.

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