Sales of local computer brands like Mustek’s Mecer and Sahara brands have come under pressure.<\/p>\n
According to Pierre Spies, MD of Tarsus Technologies (the largest IT distributor in the country), sales of top three local PC brands have fallen 19% in the second quarter of this year. Well-known international brands like HP and Dell have picked up the slack in sales, as these desktops are now retailing at the same price as the local machines (below R3 000) for the first time. Local players have reached the stage where they simply cannot drop prices further, and consumers are choosing better-known international brands instead.<\/p>\n
Pinnacle’s Proline machines are holding their ground but comparing the top three local players to the top three international (HP, Dell and Acer), local brands are losing ground and this decline could well accelerate.<\/p>\n
Spies says that the desktop and notebook sector in South Africa saw growth of only 0,8% in Q2, compared with the (usually reliable) IDC forecast of 12%.<\/p>\n
Sales of notebooks which saw a 25% increase in the quarter made up for the decline in desktop numbers. The jump in notebook (laptop) numbers is high, but far from the increase of 50% seen in Europe in the same period.<\/p>\n
Laptops are growing in popularity as South Africans embrace mobility. Traffic is an obvious reason for people working from home, according to Spies. Some analysts have pointed to load shedding which was particularly problematic in the first quarter for the increase in people choosing desktops.<\/p>\n
Spies says Tarsus, a division of Leo Baxter’s MB Technologies (now majority-owned by Royal Bafokeng Holdings), has noticed a drop-off in the traditional retail space. Tarsus distributes brands like Acer, HP, IBM, LG, Samsung and Lenovo.<\/p>\n
In the past, Sahara made inroads into the furniture retail space, and this has been mirrored recently by Pinnacle’s Proline. Spies says, however, that because of rate hikes, sales from this channel have fallen significantly. He also sees the international brands entering this market soon, which will place more pressure on local brands.<\/p>\n
The current economic climate also means consumers are deferring decisions about purchasing or replacing computers. "The guy in the street is taking strain," says Spies. With 17 years experience in the branded products space, Spies has been through similar downturns in the economy before. He says this current slump could end up being as bad as in 1997\/98, "if it doesn’t turn" soon.<\/p>\n
Spies says the company has seen a noticeable increase in delinquent debtors. Like other companies, Tarsus has gotten less flexible with regards to credit than it used to be. Spies says the fact that government is spending more will "carry the industry for a while" until corporates "start spending" again.<\/p>\n
"The deals are still there, they’re just a lot more difficult".<\/p>\n