Government initiatives push Egyptian PC market forward

According to a new IDC study, healthy growth is expected to continue this year as the Egyptian Ministry of Education and the Ministry of Communication continue initiatives designed to increase PC penetration in schools and among the price-sensitive consumer segment. Local assemblers have benefited most so far, as participation in some of the programs was limited to domestic companies. Nevertheless, internationally known brands have solid footing in the mobile arena, and often represent the machines of choice among medium and larger businesses for all three form factors (desktops, mobile, and x86 servers).

Desktops continued to dominate the Egyptian PC market in 2003 and will do so again in 2004, accounting for around 91% of shipment volume. According to IDC's new study, Egypt Personal Computing 2004-2008 Forecast and 2003 Vendor Shares, desktop unit shipments will rise again this year, though not as dramatically as in 2003, when it nearly matched the market average. Heightened competition among local assemblers will keep desktop prices in check, with internationally known brands likely to expand their low-end product portfolios to stay competitive. "While improving, Egypt's economy is unlikely to perform any miracles," says Mediha Gramos, Senior Analyst, IDC CEMA. "This means local assemblers will continue to keep the advantage in the desktop form factor, as they can offer prices and payment options well suited to the country's home and small business users."

The portable and x86 server segments, however, are likely to remain in the hands of internationally known vendors. Following global trends, the Egyptian notebook market shot up in 2003, with unit shipments climbing by almost 68%. IDC expects growth to be more modest in 2004, but to again jump up in 2005 and beyond. By contrast, the x86 server market was flat in 2003, but should bounce back somewhat this year, with shipments expected to rise by just over 3%. For both form factors, businesses were the primary purchasers.

While local assemblers controlled most of the Egyptian PC market last year, name-brand players still made a strong showing. Among all vendors, Metra took top honors, closely followed by Prosilab. Among the international vendors, HP ranked first, its unit shipments more than double that of its nearest name-brand competitor. Also among the international players, competition was fierce, with the top five accounting for more than 96% of name-brand shipments.

"IDC expects the Egyptian market to grow over the next few years," says Gramos. "The key to success, especially for international vendors, will be in creating channel partnerships able to reach a broader customer base than the standard big-ticket clients."

IDC's new study Egypt Personal Computing 2004-2008 Forecast and 2003 Vendor Shares provides detailed analysis, conclusions, and forecasts regarding the dynamics of the country's evolving market for personal computers. The information in this study is intended to provide an understanding of the changes and challenges facing the PC industry in this emerging market. Our 2003 figures and analysis are based on information gathered from interviews with the leading IT companies (vendors, distributors, assemblers, system integrators, value-added resellers, and dealers) in the markets.