About 60% of IT hardware growth on the continent will come from tablets and smartphones this year, notes logistics company DHL.
According to an IDC statement, the tablet market in the Middle East and Africa (MEA) region grew 184% year-on-year in the first quarter of 2013, to reach a total of 2.25 million units. Increasing tablet and smartphone sales are hurting the traditional PC market, it has said.
Deutsche Post DHL says competition in the technology sector is becoming more intense and Asia's importance as both a manufacturing location and a consumer market is growing.
While Asia is still key to the sector, Africa has also witnessed an explosion in technology adoption recently and is set to develop as a region, says Charles Brewer, MD of DHL Express Sub-Saharan Africa.
The IDC notes the tablet market's growth will primarily be driven by the greater variety and availability of tablets offered at reduced prices. The market share of Android-based tablets is expected to increase significantly in 2013, mostly thanks to an increasing number of models priced $100 and below, it says.
Florence Noblot, DHL's technology sector head for Europe, Middle East and Africa, estimates that 60% of all IT hardware growth will come from tablets and smartphones this year. "Both devices also elevate a trend towards high-innovation cycles, which demands logistics providers to improve time to market while supporting competitive price positioning.
"This trend is also clear in Africa and, according to the GSMA, Africa is now the world's second largest mobile market by connections after Asia and the fastest growing mobile market in the world."
According to a recent report by Deloitte, The Rise and Rise of the African Middle Class, Africa has a disproportionately young population, as 62% of its citizens are under 25. "This is positive from an outside investment perspective, as it effectively means there is a guaranteed customer base for years to come when compared to a territory such as Europe, which has a shrinking population," says Brewer.
The Deloitte report also forecasts that, if the African middle class continues on its current growth trajectory, it will grow to 1.1 billion, reaching 42% of the continent's population, by 2060.
Slim down
IDC predicts the tablet market will record a shift from traditional, larger screen sizes to smaller screen sizes (seven to nine inches) in the coming years, due mainly to price and portability. Demand for smaller screen sizes has been increasing recently, and vendors are now investing more into manufacturing such devices.
Noblot says an overall trend towards simplified and lighter products, combined with price pressure, is challenging manufacturers, their suppliers, and sometimes even their competitors to develop collaborative solutions that improve the cost-efficiency of the technology supply chain.
"Due to the expected economic growth, technology suppliers have the ideal opportunity to penetrate the African market," adds Noblot.
Investment need
Brewer says within Africa, although there has been a significant rise in demand for electronic consumer products, the continent is still in need of increased investment from international technology companies, in order to become more than just an end-user for technology products.
By setting up shop in Africa, brands are able to service this growing market and spend significantly less on logistics costs, as they are based in much closer proximity to their customers, says Brewer. "Technology companies that locate themselves in Africa will spend significantly less on logistics."
Brewer says because of increased competition in the sector, suppliers need to adapt and improve products and services to retain and grow market share. "This presents an opportunity for suppliers to be innovative and provide consumers with the best possible products, services and prices.
"Both of these trends also promise to amplify the role of logistics as a competitive differentiator in the technology industry, notably as global companies are looking for strong and established partners to support and simplify access to the African market."
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