TRENDING
Grey imports from UAE delay
PC recovery in East Africa
political uncertainty in the build up
to general elections scheduled for
August 2017, while the government’s
introduction of monetary policy
changes has tightened access to
credit,” says Kirui Andrew, Research
Analyst for Systems and Infrastructure
solutions at IDC East Africa.
Kirui Andrew, Research Analyst for Systems and
Infrastructure solutions at IDC East Africa.
The East Africa PC market including
Kenya, Ethiopia, Tanzania, and Uganda,
declined -8.6% YoY in Q4 2016,
according to IDC. The research firm says
shipments for the quarter fell to 113,303
units as a combination of political,
monetary, and economic factors inhibited
the PC market’s performance.
“East Africa’s biggest PC market,
Kenya, continues to be hampered by
“The region is also coming under
mounting pressure from the influx of
gray imports from UAE. These imported
PCs often evade VAT, particularly in
Kenya and Tanzania, making them a
cheaper alternative that local channel
partners simply cannot compete with.”
IDC’s data shows that commercial PC
shipments in East Africa fell -9.1% YoY in Q4
2016, mainly due to reduced investments
by small and medium-sized businesses.
Meanwhile, the consumer segment saw
shipments fall -7.5% over the same
period, in part due to the aforementioned
competition from gray imports.
IT services including security
dominating Egyptian market
Jyoti Lalchandani, IDC’s Group
Vice President and Regional
Managing Director for the
Africa, Middle East, Turkey.
The Egyptian ICT market will total
$10.4 billion in 2017, according to
the latest insights presented by IDC.
The global technology research and
consulting services firm said it expects
the country to see relatively flat growth
in 2017, with ongoing government
initiatives aimed at creating technology
hubs and establishing public-private
partnerships helping to s longer-term
investment.
“2016 was a difficult year for economies around the world,
including Egypt,” says Jyoti Lalchandani, IDC’s Group Vice
President and Regional Managing Director for the Africa, Middle
East, Turkey. “Spending growth has slowed across all sectors,
with organisations increasingly looking to consolidate their IT
spend and ensure they are achieving measurable returns on
their technology investments by focusing on immediate business
outcomes. As such, we expect the investment landscape of 2017
to be shaped by initiatives related to consolidation, operational
efficiency, and IT security as emerging technologies take a back
seat until the economy improves.”
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Looking at Kenya in isolation, PC
shipments declined -16.6% YoY in
Q4 2016, primarily due to weaker
consumer spending and a reduction
in commercial sector investments.
Monetary policy changes implemented
by the Kenyan government have made
it more difficult for SMBs to access
financial services, leading to a more
cautious approach to investing in PC
h ardware.
Conversely, the Kenyan tablet market
saw explosive YoY growth of 230.5%
in Q4 2016 to total 149,906 units,
although much of this growth stems
from purchases for the government’s
Digital Literacy Programme, which
is scheduled to end in H1 2017.
Excluding the education sector
initiative, consumer spending on
tablets in Kenya fell -11.3% YoY in Q4
2016, primarily due to high inflation.
Positivo BGH and JP SA Couto, the
main vendors for the Digital Literacy
Programme, led Kenya’s overall tablet
market in Q4 2016 with shares of
37.4% and 36.7%, respectively.
Samsung placed third with 6.1%.
Despite this more pragmatic approach, Lalchandani says
Egyptian organisations are still embracing the idea of
digital transformation. “Spurred by the four pillars of the
Third Platform, cloud, big data, social, and mobility, a new
generation of IT practices is steadily gaining traction across
the country, manifesting itself in the emergence of an
innovation ecosystem built around new technologies such
as IoT and advanced information security. Indeed, IDC
research shows that two thirds of Egyptian CIOs are actively
undergoing, or currently planning for digital transformation,
with security and cloud the key drivers.”
IDC expects IT services to be the fastest growing area of ICT
investment in Egypt in 2017, with YoY growth of around 10.2%.
Cloud services, in particular, are rapidly gathering momentum,
with IDC forecasting YoY growth of 34.8% for this subset
of the IT services segment in 2017. It is still early days for
cloud computing in Egypt. But adoption is accelerating, and
organisations are increasingly beginning to consider cloud-first
SaaS software-as-a-service deployments for new workloads.
Security will also feature high on the agenda in 2017, as Egyptian
organisations look to build up their defenses following a very
challenging 2016. According to IDC, other key areas of strategic
focus in 2017 included improving the alignment between
IT operations and line-of-business expectations, and using
innovative technologies to solve IT and business problems.
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