Gulf PC market thrives with boost from portables, says IDC

According to a new IDC study, shipments are expected to jump by more than 32% this year as continuing governments reforms and various egovernment and ebusiness initiatives help drive the sale of hardware. In terms of value, falling prices will be partially offset by a shift to portables and higher-speed desktops, resulting in an expected rise of more than 25% in 2004.

With the largest population in the region, Saudi Arabia also represented the largest market for PCs in 2003 and will again in 2004. With less than a tenth of Saudi Arabia's population, the UAE was close behind in second, reflecting the success of Dubai as an international business center and large projects in the government, financial, and oil and gas sectors. Together, these two countries accounted for almost three quarters of PC shipment volume in 2003 and will continue to dominate in 2004. "The elimination of customs duties within the GCC should help spur the country markets across the board," says Omar Shihab, Analyst, IDC CEMA's Systems Group. "Moreover, strong economic growth and the high price of oil will fuel the acquisition of hardware needed to bring IT levels up to international standards at both public and private organizations."

Desktops continued to dominate the Gulf PC market, accounting for more than 67% of PC shipments in 2003. IDC expects the form factor to again dominate in 2004, though it will lose a few points of share to portables, which will remain the fastest growing form factor over the next few years. By contrast, x86 servers are expected to hold steady in terms of market share. "Mobility is getting hot in the Gulf states," says Shihab. "Not only are prices falling for portable PCs, but mobile phones are increasingly common; and both small and medium-sized organizations as well as large businesses are investing in portables both for the space saved and for the flexibility they afford. Nevertheless, shipments of all three form factors are expected to expand over the next few years."

Name-brand players dominated the PC market of the Gulf last year. Capturing all of the top five spots, international vendors accounted for more than 71% of unit shipments and more than 75% of the value of shipments in 2003. HP took top honors, with Dell coming in second, and Acer third. "Local assemblers have suffered from stepped up efforts by international players to obtain and keep customers," says Shahib. "Name-brand vendors have built on their brand awareness and have started offering services local assemblers are generally not equipped to match."

IDC's Gulf States Personal Computing Forecast 2004-2008 and 2003 Vendor Shares (IDC# ZJ03L) provides detailed analysis, conclusions, and forecasts regarding the dynamics of the region'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 these emerging markets. All 2003 figures and analyses 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.