iMagic? Apple's UAE shipments drop but market share goes up

These are tough times for the global and regional PC vendors, with an across-the-board decline in PC shipments in the world, including in the Middle East and Africa (MEA).

In fact, the MEA PC market has just witnessed its second consecutive ‘worst quarter ever’, suffering another sharp decline in the third quarter of this year, according to a latest report from International Data Corporation (IDC), a technology research and consulting firm.

Shipments slumped 27.8 per cent year-on-year, which represents the steepest decline ever recorded in the region for a single quarter, IDC said in a statement.

This is on the back of a massive decline that the market saw in the previous quarter, suggesting a crashing regional PC market.

Read: Apple's secret sauce keeps it hot even as others lose out

Top 5 Vendors – and how they fared

The top three vendors remained unchanged in Q3 2015, with all of them suffering significant declines.

#1 Market leader HP, based out of Palo Alto, California, US, continued to lead in terms of market share, but saw its shipments fall by more than a quarter (27.7 per cent) year-on-year.

#2 Chinese-American multinational Lenovo was second-placed, suffering the most significant decline among the Top 5. Lenovo, based in Morrisville, North Carolina, US, saw shipments falling 37.6 per cent as IDC says the vendor made “greater efforts” to reduce its inventory levels.

#3 Third-placed Dell, based out of Round Rock, Texas, US, was the best placed among the big guns, posting a decline of ‘just’ 11.6 per cent.

#4 Taipei-based Acer rose to become fourth-placed and was relatively better placed, experiencing a decline of 16.9 per cent during the quarter.

#5 Fifth-placed Taipei-based Asus got hit almost as hard as its Chinese peer Lenovo, with its shipments plunging by 36.3 per cent.

IDC said that it is worth noting that the top three vendors combined accounted for more than 65 per cent of commercial PC demand in the region during the quarter.

The firm said that local desktop assemblers in the region continued to suffer significantly in comparison to the previous year as demand for their devices continues to be cannibalised by the growing availability of aggressively priced refurbished PCs.

The Apple magic

Cupertino-based Apple, however, managed to gain UAE market share despite its shipments declining too. That's because the decline in the number of Macbooks and iMacs shipped to the UAE was less than the decline in other vendors' desktops and PCs. 

“In line with the rest of the players in the UAE PC market, Apple also suffered a decline year-on-year in PC shipments,” Fouad Charakla, research manager for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey, confirmed to this website.

“However, suffering a relatively softer decline when compared to the market average, the vendor managed to gain some market share, with its market share reaching slightly over 4 per cent,” he said.

Nevertheless, as the IDC research manager maintains, Apple's UAE market share isnowhere close to its global market share of 7.5 per cent, featuring as it does in the global Top 5 PC vendors. “However, it should be noted that Apple’s PC market share in UAE is still considerably lower than the market share Apple holds in the global PC market,” he said.

The shrinking PC

According to analysts, there will continue to be a gradual shift in the weight of demand from consumers to the commercial segment as a growing proportion of home users switch from PCs to tablets and smartphones and commercial end-users maintain their loyalty to PCs. As a result, commercial demand for PCs in the region is expected to surpass that from home users by the year 2017.

According to IDC data, the MEA PC market suffered a 25.6 per cent decline in the second quarter of this 2015 – which was at that time its steepest decline ever recorded in the region for a single quarter.

Regionally, this quarter saw an even sharper decline, with desktop shipments down 21 per cent year-on-year to total 1.3 million units, while the notebook segment shrank 32.6 per cent to total 1.7 million units, partially owing to the cannibalisation of consumer demand by tablets and smartphones.

Another major reason for the decline in shipments is the growing availability of aggressively priced refurbished PCs, says IDC.

PC digging its own grave, with a little help from mobile

The bigger picture remains that the ‘refresh cycle’ for PCs is much longer than that for smartphones and tablets, and users don’t bother to upgrade their PCs as often as we do like to snap up newer smartphones and tablets.

The PC-makers themselves are to be blamed too, missing a trick or two in failing to refresh the line-ups regularly with innovative features. The smartphones-makers, on the other hand, have been hard at work in that department, doing out newer features with every passing iteration of their devices.

“We need to keep the excitement alive,” Emmanuel Fromont, Corporate Vice President, Acer Inc. and President of Acer EMEA, told Emirates 24|7, in October this year while launching the Acer Predator series of PCs here in Dubai.

Daniel Trachino, General Manager of Acer Mena, added that, “in mature markets, the smartphones are becoming bigger, and the laptops are becoming hybrids, and both these categories are infringing on the traditional tablet segment.”

Globally too, the PC market is set to shrink by 10 per cent this year – its worst decline ever, beating the 2013 record decline of 9.1 per cent, said IDC. 

“In a continuation from Q2 2015, Turkey and the 'Rest of the Middle East' region (Iran, Iraq, Syria, Yemen, Afghanistan, and Palestine) experienced the sharpest declines within MEA,” says Charakla.

“However, the quarter also saw steep declines in Saudi Arabia and Pakistan, with the former seeing its economy hampered by low oil prices and the latter failing to repeat the massive education projects that caused a spike during the corresponding quarter last year.”

Worst year ever?

The final quarter of the year is expected to play host to yet another steep year-on-year decline, with IDC forecasting the market for 2015 as a whole to total 14 million units, down 22.2 per cent on 2014.

“Most of the key inhibitors currently hampering PC demand – such as low oil prices, exchange-rate fluctuations, and uncertainty due to the ongoing war against ISIS – are also impacting consumer confidence and are expected to persist for at least the next few quarters,” says Charakla.

“As a result, IDC has significantly downgraded its regional PC market forecast for 2016, although a recovery is predicted towards the end of 2016 and into 2017.”

According to IDC’s new forecast, 2016 will see mild growth in shipments, with a much bigger recovery expected in the year 2017. Looking further ahead, the years 2018 and 2019 will also experience mild shipment growth, stemming mainly from countries with low PC penetration rates, such as Pakistan, the 'Rest of the Middle East' grouping, Egypt, Nigeria, and certain other parts of Africa.

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