Industry & Money

The Polarised World Computer Market

The new technology in data processing is declining the market order placement for computers.

The world computer market has in rough estimate sold 49,786,899 units of PC between January and February 2012, while the worldwide PC shipments are expected at a total of 440.6 million units in 2012, a 13.6 percent increase from 2011. This is down from Gartner’s previous outlook of 14.8 percent growth for 2012.

Worldwide PC shipments are forecast to reach 387.8 million units in 2011, a 10.5 percent increase from 2010, according to Gartner’s preliminary forecast. This is down from Gartner’s previous projection of 15.9 percent growth that year.

The primary source for Worldometers statistics on PC sales is provided by Gartner and According to Gartner Dataquest’s statistics, in April 2002 the billionth personal computer was shipped. The second billion mark was supposedly reached in 2007, and this is a time that Nigeria as a country started experiencing an influx of computer systems.

The market has however since then been very unstable, as it is a bit difficult to forecast what the situation in the market is per time. Pricing, quality of products and unhealthy competition are among others reasons of Nigeria’s computer market instability, despite a steady demand for computer products across the globe, says a major computer dealer at the Lagos popular Computer village.

Mac Eze, the Vice President of Computer Dealers and Allied Products Association of Nigeria (CAPDAN), claimed that “there is nothing encouraging about computer market this year in Nigeria. The economy is not friendly, other than that there are extraneous factors that must be put at bay”.

He said despite the challenges, the Lagos Computer Village, was arguably the largest computer product market in Africa. However, the dealers berate the high import duties charged on computer products by the government.

Also considering the fact that the entire computer product market in Nigeria exists via importation, the First Vice President of Computer Society of Nigeria, David Adewunmi, once stated in an interview that Nigerians will continue paying more for computer products if government doesn’t finance IT education in schools properly and encourage local system builders of such products.

Despite several research results and sales predictions, the PC market in Nigeria is still shaky and is steadily being overtaken by the use of cellphones and other hardware products. The emerging market of the cellphones in Africa and its rapid growth in Nigeria has however called for a question on how many computers are actually in use out of those produced and acquired at the market? According to a report by Forrester Research, there were over one billion PCs in use worldwide by the end of 2008.

Forrester also predicts that with the PC adoption in emerging markets growing fast, it is estimated that there will be more than two billion PCs in use by 2015. Though, it took 27 years to reach the one billion mark of PC’s acquisition, it predicts that it will take only 7 to grow from 1 billion to 2 billion and the rave is also very evident in Nigeria, even as government and private platforms are transforming into a full digital age of service provision.

Corroborating Eze’s comment on the staggering status of local computer market in Nigeria, the CEO of Geniac Computers, Mr. Gboyega Ojuri blamed the trend on the increasing importation of Computers into Nigeria, without a proper check by the government, while according to him, “PCs shipped from Dubai continue to sell more than even what is on offer from the government-assisted PC mass acquisition programme, tagged ‘Computers For All Nigerians Initiative.”

Nigeria and other West African ICT markets has been massively in patronage of computers imported directly from Dubai and thereby continue to dominate locally assembled PCs. This has however been blamed for negative impact on the boost of the Nigeria’s fledgling computer hardware manufacturing industry market, and threatening its survival.

“In terms of pricing, it would be difficult to match what these other Arab companies are bringing into the market,” said Ojuri, claiming that, “the factors of production are against any local manufacturer of PCs. Take irregular power supply and the cost of maintaining power-generating sets, the manpower and cost of locally transporting the goods. By the time you add the cost of producing one unit of PC locally to what it would take to buy and ship in the same PC from Taiwan or Dubai, the unit price of one locally produced PC would buy about two imported PCs.”

The computer market in Nigeria also stands between the importation of brand new system and the fairly used type from Europe. According to Kazeem Olagbile, the CEO of Suntan Computers at Computer Village, “only recently that we now have economically make laptops that could be afforded by middle men, the prizes were so high and the only alternative is the patronage of the fairly used market.”

He claims that even the agencies of government even patronize the ‘tokunbo’ market, “sometimes the tokunbos are even better than the so called new ones,” he said, advising, “Some of the tokunbo spare parts are more reliable than the so called new ones. They are shabbily made and do not last. So, don’t let anyone deceive you in the name of saying it is new. Check it well.”

However, the variance in the market goes to the extent of defining the extent of purchase, especially when it is in bulk of just few ones. Almost all computer makers have offices in Nigeria and could be contacted for bulk purchase or even customized built, depending on the need.

Most corporate organization does not however patronize the likes of computer village and shop, but approach the makers shops/country offices. The only difference in the two market is however the originality and prize. The prizes with the makers shops are always higher, though sometimes with a reliable warranty and maintenance agreement.

Between 2000 till date, the reliance on Desktop built computers have however shifted to Laptops due to its portable sizes and the prizes presently range from N40, 000 and above depending on the features and manufacturers. Also, the increasing use of Handset phones keeps reducing, as many now do some work on the phones, especially the internet related services is reducing the size of computer market.

Presently, the corporate personnel and students are biggest patrons of PC market, while the replications of big sales platforms like the Lagos Computer Village is also required to widen the acceptability of its need by many Nigerians.

In his own view that the call for better E-operations and E-Services should be employed to encouraged the market, a staff of one of the telecommunication industry in Abuja said that it is absurd to note that a good percentage of the Nigerian Police cannot even operate computers, “so which market do you want them to patronize? When they stand at the check point and you are even going with it, they don’t know what to check to validate ownership. So, I think it is time to equip all Police Stations and offices, then private businesses will have no choice than to take queue.”

Developed Market Swift
However in August, 2011, China for the first time passed the U.S. to become the world’s biggest personal-computer market, highlighting the growing importance of a country where big U.S. PC makers have struggled to compete against China’s Lenovo Group Ltd.

The Consumer demand for PCs has soared in emerging markets, while it has faltered in developed markets. Meanwhile, the rise of smartphones and tablet computers, most notably Apple Inc.’s iPhone and iPad, has raised concerns that purchases of such products could eat into demand for traditional desktop and laptop PCs. Reflecting those challenges, Hewlett Packard Co., which is the world’s biggest PC maker but has lost popularity with Chinese consumers, in 2011 said it is considering a sale or spinoff of its personal-computer business.

“The center of gravity of the PC industry has shifted away from the developed world,” said David Wolf, chief executive of Wolf Group Asia, a Beijing-based marketing-strategy firm.
PC shipments to China came to 18.5 million units in the second quarter, exceeding the 17.7 million shipped to the U.S. The market-research firm still expects the U.S. to receive slightly more PC shipments than China for the year as a whole as sales in the U.S. usually surge during the year-end holiday season. But IDC expects China’s PC shipments to reach 85.1 million units for all of next year, compared with 76.6 million for the U.S.

Growth in China’s computer market is likely to lead foreign PC makers to continue increasing their investments in the country and this development has been a blessing to the African computer market, as the Chinese influx are now cheaper than the previous imports.

Gartner analysts said that while PCs remain important to consumers and businesses, purchases can be easily delayed, especially when there are complementary devices that are seen to be more attractive.

“Media tablets have dramatically changed the dynamic of the PC market and HP’s decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market,” said George Shiffler, research director at Gartner in a statement issued by the group. “Vendors’ tried and true business models are failing as traditional PC functionality is extended to other devices and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in.”

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