The Middle East and Africa (MEA) personal computing devices (PCD) market, which is made up of desktops, notebooks, workstations, and tablets, declined 6.2% year on year in Q4 2017, according to the latest insights from International Data Corporation (IDC).
The global technology research and consulting firm’s Quarterly PCD Tracker shows that shipments fell to around 5.9 million units for the three-month period, which represents the lowest quarterly volume recorded for more than five years.
“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,” says Fouad Charakla, IDC’s senior research manager for client devices in the Middle East, Turkey, and Africa. “Kenya suffered huge declines in its tablet market after a massive education project that boosted shipments in Q4 2016 was not repeated in Q4 2017.”
With end users continuing to shift to large-screen smartphones, demand for slate tablets is declining across the region, although the delivery of a large education project in Ethiopia saw an increase in shipments to 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,” says Charakla. “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 recent introduction of 5% VAT in both the UAE and Saudi Arabia had a considerable impact on the market, with some vendors pushing a much higher sell-in for both countries during Q4 2017. Additionally, Charakla says various market players shipped more aggressively into the UAE during the quarter as the implementation of VAT inevitably complicates the country’s position as a re-export hub.
“As a result of these factors, both the UAE and Saudi PCD markets are expected to experience a slow start to 2018,” says Charakla. “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.”
Looking at the PC market in isolation, each of the top five vendors maintained their respective positions when compared to the corresponding quarter of 2016:
|Middle East & Africa PC Market Vendor Shares – Q4 2016 vs. Q4 2017|
|Company||Q4 2016||Q4 2017|
The top five tablet market players also maintained their respective positions in Q4 2017, although their individual performances varied. Samsung, Lenovo, and TCL all experienced year-on-year declines in their tablet shipments, while Apple recorded moderate growth. The big winner was Huawei, which saw its tablet shipments to the region grow significantly year on year in Q4 2017.
|Middle East & Africa Tablet Market Vendor Shares – Q4 2016 vs. Q4 2017|
|Company||Q4 2016||Q4 2017|
It is worth noting that, together, HP, Lenovo, and Dell accounted for around 75% of overall commercial PCD shipments in the region during Q4 2017, with the rest of the market’s players primarily focused on serving consumers.
“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,” says 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, ultraslim notebooks, and detachable tablets to all show healthy shipment growth over the coming years.”
“In the shorter term, large volumes of notebooks are expected to be delivered into the education sectors of both Pakistan and the UAE over the coming quarters,” continues Charakla. “It is also important to note that massive education projects, exceeding millions of units, are currently at the early discussion phase in countries such as Turkey and Pakistan and have not yet been incorporated into IDC’s forecast due to the lack of certainty around their scale and timing.”
Personal computing devices sales still decline in MEA
The Middle East and Africa (MEA) personal computing devices (PCD) market, which is made up of desktops, notebooks, workstations, and tablets, suffered a decline of -7.3% year on year in Q2 2017, according to the latest insights from International Data Corporation (IDC).
The global technology research and consulting firm’s Quarterly PCD Tracker for Q2 2017 shows that PCD shipments fell to around 6 million units for the quarter.
“As forecast, the market followed a similar pattern to recent quarters, with the downturn primarily stemming from a decline in shipments of slate tablets and desktops,” says Fouad Charakla, IDC’s senior research manager for client devices in the Middle East, Turkey, and Africa. “This was the result of desktop users increasingly switching to mobile devices such as notebooks or even refurbished notebooks, while users of slate tablets shifted to smartphones. These trends translated into year-on-year declines of -21.9% for desktops and -15.7% for slate tablets in Q2 2017, while shipments of notebooks and detachable tablets increased 11.0% and 63.3%, respectively over the same period.”
“Market sentiment in the region remained low overall, although an aggressive push from some slate tablet vendors meant the market declined much slower than expected,” continues Charakla. “At the same time, heightened competition has also made it harder for certain players to sustain their slate tablet businesses and generate profits, causing them to lose interest in the slate tablet market altogether. Despite this, slate tablets are still the most popular computing device among home users in the region.”
Looking at the region’s key markets, IDC’s research shows that when compared to Q2 2016 overall PCD shipments were down -11.4% in the UAE, -8.9% in Turkey, and -6.7% in the ‘Rest of Middle East’ sub-region (comprising Iran, Iraq, Syria, Yemen, Palestine, and Afghanistan). South Africa and Saudi Arabia bucked this trend, recording year-on-year increases of 3.5% and 9.6%, respectively.
A massive education delivery in Pakistan acted as a key driver for notebook shipments in the region overall. Similarly, the education sector was the biggest driver of detachable tablet shipments, triggered by a huge delivery in Kenya, as well as two other deliveries in Pakistan and Turkey, which enabled this category to achieve the fastest growth of all the PCD categories.
“While a component shortage prevented market players from reducing their prices too much, the average price of consumer notebooks experienced a considerable year-on-year decline in Q2 2017,” says Charakla. “This played a key role in driving demand from the consumer segment, and was reflected in the growing popularity of lower-priced notebook models.”
Looking at the PC market’s vendor rankings, each of the top five vendors maintained their respective positions compared to the previous quarter, with the top four all gaining share.
Middle East & Africa PC Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
Although Samsung continued to lead the tablet market, the vendor rankings in the space saw quite a few changes, with Huawei catapulting itself to second place. Lenovo also climbed up a position compared to the previous quarter, causing Apple to drop to fourth place.
Middle East & Africa Tablet Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
“Looking to the future, the MEA PCD market is expected to decline at a faster rate than previously forecast for 2017 as a whole,” says Charakla. “Technological shifts are playing a pivotal role in deciding the future of this market, with demand for certain products shifting to other PCD products and beyond (i.e., smartphones). Accordingly, shipments of slate tablets are expected to continue declining over the coming years as demand is cannibalized by smartphones. Meanwhile, the ongoing shift to mobile computing will see growth in the desktop market remain close to flat throughout IDC’s forecast period ending 2021. Notebook shipments will experience very slow growth beyond 2018, while detachable tablets will remain the fastest growing PCD category, eating away share from other computing devices.”
Gazer cyber-spies exposed
ESET has released new research into the activities of the Turla cyberespionage group, and specifically a previously undocumented backdoor that has been used to spy on consulates and embassies worldwide.
ESET’s research team are the first in the world to document the advanced backdoor malware, which they have named “Gazer”, despite evidence that it has been actively deployed in targeted attacks against governments and diplomats since at least 2016.
Gazer’s success can be explained by the advanced methods it uses to spy on its intended targets, and its ability to remain persistent on infected devices, embedding itself out of sight on victim’s computers in an attempt to steal information for a long period of time.
ESET researchers have discovered that Gazer has managed to infect a number of computers around the world, with the most victims being located in Europe. Curiously, ESET’s examination of a variety of different espionage campaigns which used Gazer has identified that the main target appears to have been Southeastern Europe as well as countries in the former Soviet Union Republic.
The attacks show all the hallmarks of past campaigns launched by the Turla hacking group, namely:
- Targeted organisations are embassies and ministries;
- Spearphishing delivers a first-stage backdoor such as Skipper;
- A second stealthier backdoor (Gazer in this instance, but past examples have included Carbon and Kazuar) is put in place;
- The second-stage backdoor receives encrypted instructions from the gang via C&C servers, using compromised, kegitimate websites as a proxy.
Another notable similarity between Gazer and past creations of the Turla cyberespionage group become obvious when the malware is analysed. Gazer makes extra efforts to evade detection by changing strings within its code, randomizing markers, and wiping files securely.
In the most recent example of the Gazer backdoor malware found by ESET’s research team, clear evidence was seen that someone had modified most of its strings, and inserted phrases related to video games throughout its code.
Don’t be fooled by the sense of humour that the Turla hacking group are showing here, falling foul of computer criminals is no laughing manner.
All organisations, whether governmental, diplomatic, law enforcement, or in traditional business, need to take today’s sophisticated threats serious and adopt a layered defence to reduce the chances of a security breach.