PC promos

Special purchasing promotions are all the rage across the Middle East as governments and other public sector bodies look to boost PC penetration. While the schemes look attractive on paper, success is far from guaranteed.

  • E-Mail
By  Stuart Wilson Published  July 21, 2004

Special purchasing promotions are all the rage across the Middle East as governments and other public sector bodies look to boost PC penetration. While the schemes look good on paper, success is far from guaranteed. These schemes typically offer flexible financing for the new PC owner and can even be tied up with internet access packages to make them more attractive.

Egypt jumped on the PC promotion bandwagon a while ago with an ambitious scheme to boost local assembly and drive up PC ownership levels in the country. To date, that scheme has been a mixed success with approximately 100,000 buyers taking the plunge. Now Egypt looks set to go one better with a scheme to promote notebook ownership among its business community.

Elsewhere, the Saudi Arabian Communications and Information Technology Commission (CITC) looks set to embark on an ambitious ‘PCs for Homes’ initiative with a high-flying target of bringing PC ownership to a million more families in the Kingdom during the next five years.

Often these schemes aim to achieve much more than simply boosting PC penetration levels. They are also used to encourage the development of IT manufacturing — and more specifically PC assembly — in the target country. It is a worthwhile goal but often any growth in PC production is focused on a few handpicked assemblers and excludes the wider community of potential suppliers.

With banks, telcos and even utility service providers such as electricity companies often involved in collecting the monthly installments on these promotions, limiting the number of PC assemblers used makes sense and keeps it simple. Nevertheless, it immediately puts a few assemblers in an advantageous position over the competition.

PC promotion schemes hit the European markets in the late 1990s. For these schemes, internet access packages were the main selling point with the PC chucked in as a makeweight to sweeten the prospect of signing a two-year contract with an ISP. Today, these schemes have all but fizzled out.

It is important to understand that these schemes have their limitations. First off, not everyone wants to commit to a long-term financing deal — especially if it is tied into another service such as internet access. Secondly, those who can afford to go and buy a PC outright will continue to see that as the preferred method of payment.

Two years is a long time in the world of PC evolution. Those innocuous beige boxes drop in value like a stone as the relentless march of components development, quicker speeds and feeds and economies of scale in manufacturing, push prices down and performance up. Admittedly, for the first time buyer these schemes do have attractive qualities by making the PC seem more affordable.

However, there is no reason why retailers and vendors shouldn’t take on this challenge by coming up with easier payment models for consumers interested in purchasing a PC in the Middle East. Not only would this transform the purchase price into a series of bitesize chunks, it would also allow consumers the freedom to pick and choose the vendor, form factor and model they desire — not have to pick from a limited range.

To be perfectly honest, the track record of these schemes in other parts of the world is unimpressive. Yes, they achieve some reasonable numbers, but ultimately the consensus of opinion is that these were the consumers who were ready to purchase anyway. If the scheme hadn’t been there, they would have gone to the local PC shop instead. As such, there remains a very real doubt as to whether these schemes significantly accelerate PC purchasing in a market.

Taking a trip down memory lane, when the internet hype reached its peak in 1999, a handful of companies actually hit the market in the US and Europe offering free PCs to customers. The cost of the PC was recouped through the monthly internet access package, or in one innovative case through a permission marketing model that ran adverts across the screen of the user when he was online. These companies no longer exist.

So should special PC promotions be put out to pasture? Not a bit of it. Anything that encourages PC purchasing is a leap forward for the IT industry in the region, and opening up a new buying method has to count as a step in the right direction. Selling PCs has a knock-on effect into peripherals and software and also spawns a generation of second-time buyers for a few years down the line.

How can PC purchasing be encouraged across the Middle East? Do these schemes really work? E-mail your thoughts and opinions to Channel Middle East.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code