Growth in Mobility Trend Spells Further Decline for PC Market

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The Middle East and Africa (MEA) PC market continued to experience a steep decline during the third quarter of 2013 decreasing 15.0% in volume year on year according to research firm IDC. The results showed that PC shipments into the Middle East Africa and Turkey region reached a total of 4.2 million units. As forecast portable PCs declined at a faster rate than the overall market with shipments down 17.8% year on year to total 2.5 million units while desktops declined 10.4% year on year with a total of 1.7 million units shipped.

In contrast, the tablet market in the Middle East and Africa region grew 181.8% year on year in Q3 2013, reaching a total of 3.2 million units. Although Apple's proprietary operating system, iOS, and Windows OS were contributors to this growth, the major contribution came without a doubt from the Android operating system, with a total of 2.39 million Android units shipped in the quarter.

"We have witnessed a steady decline in the PC market as more and more people shift toward mobile devices, ranging from portable PCs to tablets and smartphones," says said Adriana Rangel, research director for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey. "That shift has had a tremendous impact on PC shipments in the region, particularly across the consumer segment. The largest declines in PC shipments across the region have been in Saudi Arabia, Egypt, and Turkey. While the UAE has seen a steady decline, the decrease in shipments has not impacted the market to any great extent."

IDC's research shows that the shifting of demand from PCs to other mobile devices is expected to continue acting as the primary inhibitor of PC demand throughout the forecast period. IDC is forecasting a further year-on-year decline of 14.4% during the final quarter of 2013. The same period is likely to see PC vendors placing a growing emphasis on their lighter and sleeker portable PC offerings, including ultra-slim notebooks and convertibles.

Regional Facilitators and Inhibitors

Looking at individual key markets, the 'GITEX' event held in the UAE positively impacted PC and tablet shipments in the country. However, as previously forecast, the impact was reduced considerably as the event has now shifted from its traditional annual frequency to a bi-annual occurrence.

The Saudi PC market continued to suffer from the recent changes to the kingdom's labor law, which has forced several workers to leave the country, causing a shortage of supply of workers in several cases, and consequently impacting both commercial and consumer spending on PCs in the country.

The Turkish market also experienced a significant decline and is expected to suffer again during the final quarter of 2013 due to its weakening currency. However, the situation in both Saudi Arabia and Turkey will not prevent the tablet market from growing aggressively through the forecast period.

Egypt saw a noticeable decline for the PC market in Q3 2013, largely due to a number of vendors holding back shipments due to the country's political situation, shipping no or extremely low numbers of units into the country.

Regional PC Market Outlook

HP maintained leadership of the overall regional PC market in Q3 2013. After suffering year-on-year declines for two consecutive quarters, the vendor finally managed to post positive growth of 7.4% during the third quarter of the year.

Lenovo continued to attain the fastest growth rate among the region's top PC vendors, with its shipments increasing 25.1% year on year, enabling it to claim the number-two position in the market. Dell dropped to third place after suffering an overall year-on-year decline in shipments of 16.4% on the back of a significantly steeper fall in the consumer space.

Toshiba and Acer ranked fourth and fifth, respectively, with declines of 30.5% and 33.4% year on year. Both vendors have a significantly weaker presence in the commercial segment than the top three vendors.

Regional Tablet Market Outlook

Samsung achieved strong growth during Q3 2013 to claim the region's top spot for the first time, recording total shipments of 775,000 units in the process. Apple's growth continues to be the slowest of the major tablet vendors, with shipments increasing just 1.6% to total 693,000 units.

Lenovo held on to third spot, shipping 206,000 units in Q3 2013. The vendor has extremely aggressive plans for upcoming quarters. Acer ranked fourth with a total of 98,000 units. Casper, a local Turkish brand, re-entered the top-five rankings, filling fifth spot after shipping a total of 96,000 units, spurred by the company's aggressive marketing promotions in the consumer segment.

"Though iOS continues to lose share in the region, the launch of the iPad Air and iPad mini with Retina display should help the vendor grow in terms of units shipped over the forecast period," says Fouad Rafiq Charakla, research manager for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey. "Windows OS is expected to grow as more businesses are adopting tablets in the work environment, while the growth of Android OS will continue to be attributed to the huge number of local and Far-Eastern brands that are shipping sizeable volumes of such devices quarter after quarter."

It is clear that tablets are witnessing growing demand from commercial end users, especially in the education sector. In Qatar, the second phase of the Supreme Education Council's 'e-bag' project was rolled out in Q3 2013, with around 10,000 Windows-based tablets delivered during the third quarter. The project is expected to continue in the upcoming quarters. In Turkey, a deal for 31,000 Android tablets was won by General Mobile in the government segment. Other major deals are also expected to be completed in the next few quarters, including those with the Ministry of Education in Oman and the Ministry of Education in Egypt.

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