As the credit crunch forces companies to examine their costs, corporations, government departments and state-owned enterprises are extending the life of their computing equipment.
Graham Braum, Acer's country manager for SA, says corporate refreshments and government spending are down in the Europe, Middle East and Africa region. He says this type of spending is 10 percentage points down year-on-year.
However, retail is holding its own. The company is still seeing consumers buying, despite the slowdown in sales of durable items. While corporations are moving refresh cycles from three- to five-year cycles, almost 10% of total sales have shifted to the retail sector.
“Corporate spend and government spend is not what it used to be,” says Braum.
Spoilt for choice
While items such as motor vehicles are now out of the equation, technology offers consumers so much variety that it has become top-of-mind, he notes. “There is just so much variety.”
He says the changes in the past eight months, and the variety that is expected to hit stores in the next year, have kept the sector fresh and interesting.
Braum says consumers can embrace the technological environment and use it to increase productivity. One example he cites is the traditional desktop, which has undergone a revolution. Machines will soon be available with the traditional box attaching onto the screen, saving space, he explains.
Acer expects these types of innovations to address new audiences and meet new needs, and in doing so, bolster sales. “This is exciting.”
As more people want mobility, sales of items such as netbooks are “exploding”, he adds. Netbook sales are growing faster than other sectors.
Dealer pressure
Alison Greenhough, Mustek dealer sales manager, says the company has felt a drop in the dealer market and - although it will meet target for the financial year that ends this month - this has not been without pain. Some sales have been put on ice and dealers have seen cash flows under pressure. In some instances, Mustek has renegotiated credit terms.
Greenhough says there has been a move towards longer refresh rates, and dealers are reporting that clients would rather fix or upgrade existing machines.
Shereen James, Mustek retail sales division manager, says, at the start of the year, the company had set targets for the retail segment that it thought were unrealistic as a result of the economic climate. However, it has met these targets and will have exceeded the previous financial year's sales.
She says the first half of the new financial year, which starts in July, is not expected to be easy as interest rate decreases will not have filtered through to consumers' pockets yet. The company sees most of its sales during the back-to-school season, at the beginning of the calendar year.
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