Monday, October 12, 2009

Egypt's Hardcopy Peripherals Market Suffering Under Weight of Downturn, says IDC

IDC research shows that shipments of hardcopy peripherals to Egypt continued to record sharp year-on-year declines in volume during the second quarter of 2009. This marks the third consecutive quarter of decline in the Egyptian market since the onset of the global financial crisis.

Shipments of hardcopy peripherals fell to 62,813 units worth $23.18 million in Q2 2009, representing a 37.2% year-on-year decline in volume and a 44.9% slump in value. Despite having very distinct characteristics, Egypt's hardcopy peripherals market came under the same pressures faced by markets throughout the region as the global financial crisis weighed down on the country's economy, leading to a considerable slowdown in demand from the corporate and consumer segments.

Government institutions and the banking sector in Egypt are key buyers of mid-range to high end printing peripherals, such machines account for a considerable portion of market value. The drop in the number and size of government and corporate tenders was a key factor behind the slowdown in shipments and the drastic decline in market value.

Research shows that various sectors of Egypt's economy suffered as a result of the financial crunch. Exports declined year-on-year, whilst tourism and Suez Canal receipts also receded, as did foreign direct investment into the country. These factors directly and negatively impacted government and corporate budgets, and also damaged business confidence in the country. "Procurement decisions and replacement cycles were delayed, and adoption criteria shifted to lower specifications, to suit cost control measures," says Rasheed Janabi, Senior Analyst with the Imaging and Hardcopy Devices Group at IDC Middle EastIDC Middle East, Africa, and Turkey.

Shipments of laser peripherals to Egypt in Q2 2009 declined 32.1% year-on-year to just under 28,800 units, while the value of those shipments fell 45.0% to $19.82 million. "The factors leading to this decline relate to the cuts in government and corporate procurement budgets. This was compounded by measures undertaken by the channel to weather the financial crisis, such as lowering trade volumes and limiting stocking times and levels," says Rasheed Janabi. "Several vendors resorted to special measures to tackle the slump in demand, including channel restructuring, competitive pricing strategies, and a shift in product focus to lower speed segments."

Low consumer confidence also took its toll on demand for inkjet printers and multifunctional peripherals (MFPs) in Egypt, with shipments declining 40.8% in volume and 45.9% in value year-on-year in Q2 2009 to 32,914 units worth $2.67 million. The slowdown in consumer demand has been compounded by the challenges faced by the channel, resulting in weak inkjet shipments since the turn of the year.

IDC's hardcopy peripherals tracker fills the need for detailed and timely supply side information on Egypt's market for hardcopy peripherals (printers, MFPs, single-function copiers). The comprehensive database details the changes and trends in the increasingly competitive Egyptian market and includes powerful query filters and essential market intelligence that lets users generate actionable insights to plan short- and long-term strategies. It also provides detailed overviews of Egypt's HCP market and analyzes key products, trends, and vendor strategies, sorting data by vendor shipments and revenue, based on technology, price band, model, and speed.