High inflation and low business confidence have stifled growth in the local PC market, which grew only 6.2% in 2007.
The IDC states, in a recent report, that 1.8 million fewer PCs were sold between 2007 and 2008, as compared to 2006.
"The overall slowdown in growth in 2007 was partly due to the lowest business confidence levels seen in the last three years, which led to lower investment, higher inflation rates, and lower consumer spending," says IDC SA research analyst Hannes Fourie.
Fourie adds that retail sales of PCs have also declined. The analyst says retail PC sales grew 60% between the second quarter of 2007 and 2006, yet only 21% between 2008 and 2007. "IDC expects this trend to continue till Q4 when holiday spending will help lift the retail sales once again."
A recent statement from Statistics SA concurs with the IDC. The statement says retail trade sales decreased year-on-year for the fourth consecutive month, dropping 2.6% in June 2008.
Retailers reported a decrease of 0.7% in sales at constant (2000) prices for the first six months of 2008, compared with the first six months of 2007, while growth for the same period in 2007 was 8.5%.
Yet IDC is optimistic for the future and expects the PC market to grow by 15.5% in volume in 2009, due to several IT initiatives the country intends to carry out.
"In 2008, however, we expect acceleration due to increased infrastructure spending in many sectors, including government and corporate customers in preparation for the 2010 FIFA World Cup," notes Fourie.
He also says the IDC predicts that, in the next five years, the local PC market will expand by an annual average of 7.9%, with notebook adoption remaining the main engine of growth.
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