Sales of local computer brands are slumping as consumers instead opt for more well-known international brands. This has put pressure on local brands such as Sahara and Mustek's Mecer as sales of the top three local PC brands have dropped by 19% in the second quarter of 2008.
Pierre Spies, MD of Tarsus Technologies (SA's largest IT distributor), says the more familiar brands such as Dell and HP have benefited from the drop in sales as they are now retailing at below R3 000, which is at the same price as local machines.
"Local players cannot reduce prices further and have witnessed customers migrating to international brands available at a similar price," says Spies.
Tarsus distributes brands such as Lenovo, Acer, LG, HP, IBM and Samsung.
Pinnacle's Proline machines are resisting the pressure for now, but the decline in sales of local brands is set to accelerate in the face of international brands experiencing a combined 28% year-on-year growth.
Spies points out that the South African notebook and desktop sector grew by only 0.8% in the second quarter, which paints a bleak picture in comparison to the IDC's 12% growth forecast.
Greater mobility
The decline in desktop sales was offset by the 25% increase in notebook sales and, although considered significant, is lagging behind the 50% increase witnessed in Europe for the same period.
Analysts have pointed to load-shedding and increased individual mobility as reasons for the increased notebook sales.
Additionally, comments Spies, the drop-off in traditional retail space has placed local brands under more pressure.
"Sahara previously enjoyed healthy sales from the use of furniture retail space and has recently been emulated by Pinnacle's Proline, which has enjoyed similar sales success as result."
Spies warns, however, that recent interest rate hikes have resulted in a significant reduction in sales out of this channel and expects international brands to enter this market shortly, which will increase the current pressure experienced by local brands.
He also says the current economic climate is resulting in consumers deferring decisions about the purchase of a new computer.
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