IDC records PC Growth in East Africa…with HP in the Lead

The PC market in East Africa strongly expanded in the first quarter of 2011, even as the worldwide PC market contracted and the pan-African market almost stagnated, according to a recent report by market research company IDC. While global PC shipments declined 3.2% year on year during the first three months of 2011 and the overall African PC market grew a marginal 1%, East Africa (including Kenya, Tanzania, Ethiopia, and Uganda) recorded a massive 76% growth in PC shipments. IDC expects that the East African PC market will further grow by about 35–45% in 2011 before cooling off in 2012.

According to the IDC report, the growth in Q1 2011 was fueled primarily by a healthy demand for notebooks, with Kenya showing the highest uptake. This quarter was a continuation of the dynamic development in 2010, supported by the resumption of commercial demand and strong advertising and promotion efforts by vendors, as well as their efforts to find new distribution channels and strengthen existing ones. This helped to stymie unofficial (gray market) shipments.

The report also said that consumer demand was dynamic in 2010 but relaxed in Q1 2011, due to a combination of factors that affected price levels, including unfavorable foreign exchange rates and inflationary pressures. In addition, competition between vendors caused consumer pricing to plateau, and thus prevented sellers from stimulating demand around attractive price points.

“We are continuing to see increased interest in the region from international investors, especially with Kenya’s new constitution, which is hoped to be fully implemented after the next general elections, Uganda’s oil discovery, and the formation of the East African Community (EAC) market, which has a combined population of over 130 million,” says IDC analyst Stanley Kamanguya. “Investors are looking at the region as the next frontier of growth, with Kenya as the hub.  Political risk will remain a key issue for investors, however. The extent of consequences of events in North Africa and the Middle East remains unclear, which will affect the market in the short term.”

Going forward, vendors will not rely on pricing or hardware specifications for a competitive edge, but rather on their ability to engage in demand-creation programs, mobilize channels, and articulate a message that their products will provide an unmatched user experience.

Vendor Outlook

• HP maintained its top position on the East Africa PC market, with shipment growth of 46% year on year, supported by strong commercial demand and improved run-rates during Q1 2011. The vendor remained very strong in the Kenya market but continued to struggle in Ethiopia and Uganda.
• Dell came a close second in Q1, with more than 600% year-on-year growth, after an aggressive channel recruitment and revamped drive from mid-2010. Dell continued to benefit more than other vendors from the shift from the gray market to official channels, especially in Ethiopia and Uganda, where desktop sales increased significantly.
• Acer was third in East Africa in Q1, with 200% year-on-year growth, mainly thanks to deals in the telecommunications space. This channel is expected to continue growing as telcos explore data services to supplement dwindling voice revenues.

It is quite instructive that Mecer, which came into the East African market (Kenya) at the same time its Nigerian version, Zinox came into being has not managed any significant sales achievement in that region. Meanwhile Zinox was last rated as the highest selling PC brand in Nigeria Q4 2010. 

IDC’s Quarterly PC Tracker is famed to deliver timely intelligence and an inclusive database detailing changes and trends in the African PC market. The tracker enables users to view data by volume, value, country, year, quarter, vendor, brand, processor brand, and channel. It also includes easy-to-read summaries that analyze volume and value by form factor, vendor, and end-user segment.