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PC prices remain stable

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 26 May 2015
PC sales will remain flat this year, says Craig Brunsden, executive of software at AxizWorkgroup.
PC sales will remain flat this year, says Craig Brunsden, executive of software at AxizWorkgroup.

Despite the rand continuing to hover at almost R12 to the dollar, PC prices have not shown a marked increase in rand value this year.

This is according to Craig Brunsden, executive of software at distributor AxizWorkgroup, who notes the local currency gained about 3% against the dollar over the course of the year. He anticipates the currency trading between R11 and R13 over the next 12 months.

Brunsden says AxizWorkgroup aims to manage these fluctuations through a hedging and absorption strategy. He notes, however, this is a short-term strategy, and any long-term currency weakness or strength is passed on through price adjustments per shipment.

Companies like AxizWorkgroup operate on low single-digit margins, so it hedges all major short-term foreign exchange commitments and adjusts this on a constant basis, says Brunsden.

Brunsden notes PC, laptop and tablet price increases vary according to category and brand, but, in general, there have not been any major increases so far in its business as the rand has improved since December 2014. He notes it is impossible to predict pricing with accuracy, but anticipates the "usual trend of products getting gradually cheaper in US dollars until they drop off the product road maps" going forward.

"I don't believe recent currency challenges are any more severe than the last two decades. The underlying trends are still the same, but growth has to come from better cost-efficiencies and gains in market share rather than the market growth. Alignment with the right brands is of key importance."

Steady sales

AxizWorkgroup does not anticipate any major changes in PC sales, as most of its PC categories have shown growth this last year, despite the volatility in the currency, says Brunsden. "We expect the market to be flat or low single-digit growth/decline in line with the analysts' consensus."

In March, the IDC predicted global PC sales would drop 4.9% this year, as it expects the downward sales spiral to worsen during 2015. Initially, worldwide PC sales were anticipated to decline 3.3% during 2015.

Although the outlook for the channel is worse for 2015, overall sales are expected to gain in 2016 and 2017, although only slightly, the IDC's Worldwide Quarterly Tracker notes. This prediction came just after the IDC noted the Middle East and Africa PC market was continuing to recover as it posted its third successive quarter of year-on-year growth in the last quarter of 2014.

Overall, worldwide PC shipments totalled 68.5 million units in the first quarter of 2015, a year-on-year decline of 6.7%, but slightly ahead of previous projections, according to the IDC.

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