PC users start to junk their desktops

IDC's second quarter figures show notebooks taking a growing share of local PC sales.

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By  David Ingham Published  October 1, 2003

Manufacturers have a habit of putting their own spin on figures, but IDC's latest notebook sales numbers show that the region's PC users are increasingly going mobile. Approximately 64,000 notebooks were sold in the Middle East (Gulf, Levant and Egypt) in the second quarter of 2003, 20% of all PCs sold.

Hewlett-Packard and Toshiba occupied first and second place overall, with unit shares of 38% and 19% respectively. Toshiba was so pleased with its results that it took the step of releasing unit sales figures itself, the highlight of which was 543.5% year on year growth in Saudi Arabia.

This big growth in notebook sales is great news for PC makers. They make far higher margins on notebooks and the average unit selling price is also higher than for a desktop PC. IDC estimates the average selling price of a notebook in the region to be $1650.

"Notebooks are definitely taking share out of desktops," says Omar Shihab, research analyst, PC & systems programme, IDC Middle East. "Lots of corporates and government organisations are replacing desktops with notebooks."

As for the individual notebook PC makers, post-merger HP remained the clear market leader. Its 38% market share equates to roughly 24,000 units sold in the quarter, year on year growth of 24.2%.

"We continue to grow our business in a highly competitive market in the Middle East," says Christoph Schell, general manager, HP personal systems group (PSG). "Our gains are especially noteworthy since notebooks represent the fastest growing, highest margin piece of the PC business."

Toshiba, although trailing HP, was particularly pleased with its performance. It sold just over 12,000 units in the Middle East in the second quarter, nudging it ahead of IBM and Dell. Its 12,000 units sold represented year on year growth of 144%.

Ahmed Khalil, regional manager for Toshiba Computer Systems, attributed his company's progress to its three year international warranty and what he called a "dedicated network of distribution partners."

Saudi Arabia was the company's big success story. It sold 4,533 notebooks there in the second quarter (21.9% market share), compared with just a few hundred units in the same quarter of 2002. Toshiba attributed its 543.5% year on year growth to its partnership with Jarir Bookstores, one of Saudi Arabia's main notebook PC retailers.

The good news for PC makers looks set to continue. Notebook unit sales continue to grow at around 40% per annum in the region, compared to around 9% for desktop PCs. A recent decline in the average unit price of a notebook could be a concern, but IDC's Shihab says that "new features", such as Centrino and larger, cinematic-style displays, have the potential to keep prices up and margins healthy.

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