The personal computing devices (PCD) market has declined by 6.2%, shipping 5.9 million units in the Middle East and Africa (MEA) in the fourth quarter of 2017, according to a report by International Data Corporation (IDC).
The drop was largely influenced by the introduction of a 5% VAT increase in both the UAE and Saudi Arabia, as retailers were trading devices at higher sell-in prices, notes IDC.
Various market players shipped more aggressively into the UAE during the quarter as the implementation of VAT complicated the country's position as a re-export hub, says Fouad Charakla, IDC's senior research manager for client devices in the Middle East, Turkey and Africa.
"As a result of these factors, both the UAE and Saudi PCD markets are expected to experience a slow start to 2018. The PCD market size was around 23.5 million units for 2017, and is expected to decline to roughly 20.6 million units by 2022.
"Consumer spending is expected to be hit harder in Saudi Arabia, particularly due to the additional hike in prices of various goods and services since the start of 2018 caused by the doubling of petrol prices. Saudi Arabia has also introduced a so-called 'dependent tax' that is applicable to all non-citizen residents, a development that has tightened disposable income even further and caused many expatriates to consider leaving the kingdom."
Charakla explains that while the overall decline was almost exactly in line with forecasts, there was a stark difference between the individual product categories, with PC shipments growing healthily and tablet shipments declining faster than expected.
Kenya suffered huge declines in its tablet market after a massive education project that boosted shipments in the fourth quarter of 2016 was not repeated in the fourth quarter of 2017, he adds.
"With users shifting to large-screen smartphones, the demand for slate tablets continues to drop in the region, although through an Ethiopian education project, there was an increase in IDC's 'Rest of Africa' grouping of countries.
"These devices are increasingly losing significance in the market, with a large portion of them now being purchased for use by children. The low prices of these devices, together with their touchscreen interface and the availability of numerous free applications, make them particularly attractive for children's infotainment."
The fourth quarter results of both of 2016 and 2017 in terms of the PC market showed the top five vendors retaining their positions, with HP at 29.0%, Lenovo at 19.2% and Dell 14.9%, in the top three respectively, says IDC.
HP, Lenovo, and Dell counted for around 75% of overall commercial PCD shipments in the region during the fourth quarter of 2017, it adds.
The top five in the tablet market also remained the same in the fourth quarter of 2017, with Samsung, Lenovo and Huawei in the top three positions respectively.
"Looking ahead, the MEA PCD market is expected to experience a significant year-on-year decline for the first quarter of 2018, and will continue shrinking over the coming years as well, albeit at a much slower pace," notes Charakla.
"Slate tablets will experience the sharpest fall in shipments, while traditional desktops and traditional notebooks will decline at more moderate rates. By contrast, IDC expects all-in-one desktops, convertible notebooks, ultra-slim notebooks, and detachable tablets to all show healthy shipment growth over the coming years."
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