Egyptian PC market on the rebound

IDC expects the Egyptian market to rebound, with shipment volume increasing by an annual average of 18.5% through 2009.

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By  Angela Prasad Published  May 10, 2005

While the PC market contracted slightly in Egypt in 2004, laptops were again a hot item in the country. According to a new IDC study, the stagnant economy and only a very modest rise in per capita income in 2004 led to a total PC shipment dip of 0.4% in units and 4.8% in revenue. By contrast, the mobile form factor jumped a substantial 17.5% in volume and 14.2% in revenue, representing an increasing proportion of the overall Egyptian PC market. The x86 segment also expanded, but accounted for less than 2% of the total market. Given the likelihood of an economic recovery, increased demand from the education and business sectors, and government efforts to promote IT, IDC expects the Egyptian market to rebound, with shipment volume increasing by an annual average of 18.5% through 2009. With fierce competition between both PC vendors and processor manufacturers keeping prices low, desktops again dominated the Egyptian PC market in 2004, accounting for more than 90% of unit shipments. While the government program a "PC for Every Home" lost some momentum last year, it should boost desktop sales this year, which IDC expects to jump by nearly 12% in units. Notebook shipments will accelerate as businesses increasingly seek the advantages of the flexibility offered by portables. Growth in the x86 segment, although remaining in positive numbers, will slow. "The areas to watch are the desktop and portable user segments, both of which remain largely underserved," says Mediha Gramos, IDC analyst, systems group. "As the economy picks up, the unmet need will reveal itself and you'll see substantial investments in IT hardware, especially form the government and education sectors." Traditionally the stronghold of local assemblers, the Egyptian PC market has been increasingly characterised by the presence of international vendors, which supply most of the portables and x86 servers to the country. HP, Dell, Acer, and IBM together grabbed more than 87% of the international brand-name market. Nevertheless, more than 20 local assemblers, including large ones like Centra, Nordix, Metra, and Better Business, accounted for the lion's share (73.7%) of total PC shipments in 2004. "International vendors have a real fight on their hands," says Gramos. "Although they gained share in 2004 and are likely to experience growth as the market grows, both governments and businesses are turning towards local assemblers. The best bet for international vendors for keeping their toehold in Egypt is to target subsidiaries of international companies that are obliged to buy international brands due to global resource requirements.

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