Computer prices, including laptops and tablets, have increased 20% since November 2015.
This is according to The Notebook Company, a local reseller of PCs, which notes the sharp price increase has thrown the technology market into disarray and created fears that some technology companies may go bust, or have to retrench staff.
Christopher Riley, CEO of The Notebook Company, says this is the worst price rise in decades.
He attributes the price increase mostly to the weakening rand which has been wobbly since November last year.
Reuters reports the South African rand edged weaker against the dollar yesterday as further signs of economic weakness in China and a fall in oil prices kept investors on guard, but traded below the psychological level of R16 to the US dollar.
SA's consumers have started feeling the impact of a weakening rand, with analysts predicting that even the drop in the oil price will not halt the economic downturn.
"The rand has lost more than 30% over the last year and this is causing havoc for technology companies that import and locally manufacture computer items based on the dollar. At The Notebook Company, we have seen our turnover stay more or less static, but many computer companies are hurting due to the moribund rand," Riley says.
Anesu Charamba, ICT team leader at Frost & Sullivan Africa, says over the course of 2015, computer prices increased by over 15% in line with the weakening of the rand. He adds that wider research indicates this trend is occurring across multiple markets, including Europe and Japan, whose local currencies have seen a fall against the dollar.
Riley also notes that despite the recent price hikes, there are other challenges facing technology companies and end-users. "The market is so volatile that prices stay valid for just 24 hours."
He points out the margin on laptops and PC goods is mostly below 10% and this does not allow for such fluctuations.
"Additionally, if you cannot give an accurate quote due to the volatility of the market, then your quotes are almost like 'pinning the donkey'. This can create a devastating impact on companies. It would be better if the rand stayed stable so that we could quote our prices correctly. Right now it is impossible."
According to Charamba, besides the increasing cost of hardware, companies in the country must keep up with international technology trends while balancing technology adoption rates locally.
"This will be essential as companies actively seek to manage the digital transformation journey to remain relevant and competitive."
He urges companies to focus on understanding how to best align their strategies to benefits reaped from effective technology deployment.
"This will assist in cost-saving initiatives and operational efficiency management. Companies need to understand that digital transformation will be top of mind for many of their competitors, and organisations that most ably manage the process will have a distinct advantage in the market," he concludes.
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