Work in progress

Think of Egypt and the chances are that images of colossal monuments to long-dead Pharaohs or lonely feluccas sailing down the Nile will spring to mind. But when it comes to the IT industry the channel has a different vision - one of untapped potential, regional importance and a chance to make a mark on a fertile landscape.

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By  Julian Pletts Published  May 20, 2008

IDC expects that Egypt will realise some of the potential it has been exhibiting over the coming years and is predicting that by 2011 IT services spending alone will increase by over 12% to US$260m.

"The support that we saw from the government was a couple of years back, they cancelled the import duties into Egypt," explained Tarek Galal senior VP of hardware distributor Metra Computers.

"It was 5% and it changed to zero, but you still have the sales tax of 10%. That was a boost because it really made a difference," he asserted.

We have decided that our level of services cannot be different from what the end-user is offered in the UAE or Saudi. Services with the channel have become more and more important in Egypt.

Galal also explained that his business has widely benefited from a government initiative he says is dubbed 'Computers for 2010', the intention of which is to help those with lower incomes purchase a PC.

He says this has accounted for a 40% increase in PCs sold in Egypt and increased the volume of consumers using technology in the country.

The strength of the PC market in Egypt is perhaps a good indication of the level of development of the overall market.

Elsewhere in the region's more mature territories, desktop PCs are being beaten and bloodied by the more nimble and sprightly notebook.

That is not to say that the move to mobility is not coming in Egypt, it is, but just not at the rate seen by its near neighbours.

ETE, a Cairo-based assembler and distributor of notebooks and PCs that focuses heavily on CPU vendor Intel's products, explains that the dynamics of its environment are changing.

"The market is shifting now and mobility is coming," said Khaled Nasr, ETE's CEO.

"Four years ago it was about 90% of the market share for desktops. Now mobility is coming, it is almost 30% of the market."

ETE has seen its business grow strongly over the last five years as IT has become more mainstream, but he still warns that no trader in Egypt can avoid the fact that the consumer's biggest concern is the bottom line.

"First of all if you look at Egypt, it is a price-orientated market. There are no Dells or HPs in the market, those with big numbers," proclaimed Nasr.

"Now the customers are happy to buy a fully assembled PC because of the after-sales service, which we are doing, and because of the support we can offer."

Aside from Nasr's comments, the consensus when talking to the channel is that the Egyptian IT market, though experiencing very healthy growth, is a long way from establishing the services culture that could be expected of its grown up regional siblings.

"There is a lot of potential, but I think that there are a lot of deterrents as well," warned Metra's Galal over the sophistication of the Egyptian IT market.

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