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Sharpest PC decline yet

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The Middle East and Africa (MEA) PC market suffered a sharp year-on-year decline of 25.6% in Q2 2015, marking it as steepest decline ever recorded in the region for a single quarter.

The latest market insights from global technology research and consulting firm International Data Corporation (IDC) show that overall PC shipments for the quarter fell to 3.3 million units. Desktops were down 21.2% year on year to 1.4 million units, while the notebook segment declined 28.6% to total 1.9 million units.

“Two of the biggest declines were seen in Turkey and the ‘Rest of the Middle East’ region (Iran, Iraq, Syria, Yemen, Afghanistan, and Palestine),” says Fouad Charakla, research manager for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey. “Both these territories carried over high inventory levels from the previous quarter as a result of a slowdown in demand. This factor was an inhibitor of PC shipments in other parts of the region as well, including the UAE. Currency fluctuations also had a negative impact on supply and demand in several key markets across the region. In the UAE, a slowdown in tourism spending – primarily from Russia and Europe – continued to inhibit PC demand.”

The top three vendor positions remained unchanged from the last few quarters, with each of the leading vendors suffering significant year-on-year declines in their shipments to the region. HP continued to lead in terms of market share, but saw its shipments fall 26% year on year. Second-placed Lenovo suffered a 19% decline, third-placed Dell posted a downturn of 10.3%, and fourth-placed Acer recorded a decrease of 29.3%, while Asus maintained its position at number five but experienced a decline of 26.7%. Once again, local desktop assemblers suffered significantly in comparison to the previous year as demand for their devices continues to be cannibalized by the growing availability of refurbished PCs.

2015 as a whole is expected to be the region’s worst ever performance, with overall PC shipments for the year set to fall 15.7% year on year to total 15.2 million units. “Currency fluctuations both inside and outside the MEA region will remain largely responsible for the slower demand, particularly in key markets such as Turkey and Nigeria,” continues Charakla.

“Low oil prices are also impacting those countries whose budgets rely strongly on oil revenues, ratcheting up the pressure on governments to control their spending. At the same time, the cannibalization of PC demand by tablets and smartphones continues to hamper the market’s performance.”

In the longer run, IDC expects the MEA PC market to experience a partial recovery in 2016, with shipments tipped to grow 10% year on year during those 12 months. The following years are forecast to remain close to flat in terms of shipment growth. However, as previously reported, there will 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.

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Huge appetite for foldable phones – when prices fall

Samsung, Huawei and Motorola have all shown their cards, but consumers are concerned about durability, size, and enhanced use cases, according to Strategy Analytics

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Foldable devices are a long-awaited disrupter in the smartphone market, exciting leading-edge early adopters keen for a bold new type of device. But the acceptance of foldable devices by mainstream segments will depend on the extent to which the current barriers to adoption are addressed.

Major brands have been throwing their foldable bets into the hat to see what the market wants from a foldable, namely how big the screens should be and how the devices should fold. Samsung and Huawei have both designed devices that unfold from smartphones to tablets, each with their own method of how the devices go about folding. Motorola has recently designed a smartphone that folds in half, and it resembles a flip phone.

Assessing consumer desire for foldable smartphones, a new report from the User Experience Strategies group at Strategy Analytics has found that the perceived value of the foldable form does not outweigh the added cost.

Key report findings include:

  • The idea of having a larger-displayed smartphone in a portable size is perceived as valuable to the vast majority of consumers in the UK and the US. But, willingness to pay extra for a foldable device does not align with the desire to purchase one. Manufacturers must understand that there will be low sell-through until costs come down.
  • But as the acceptance for traditional smartphone display sizes continues to increase, so does the imposed friction of trying to use them one-handed. Unless a foldable phone has a wider folded state, entering text when closed is too cumbersome, forcing users to utilize two hands to enter text, when in the opened state.
  • Use cases need to be adequately demonstrated for consumers to fully understand and appreciate the potential for a foldable phone, though their priorities seemed fixed on promoting ‘two devices in one’ equaling a better video viewing experience. Identification and promotion of meaningful new use cases will be vital to success.

Christopher Dodge, Associate Director, UXIP and report author said: “As multitasking will look to be a core selling point for foldable phones, it is imperative that the execution be simplified and intuitive. Our data suggests there are a lot of uncertainties that come with foldable phone ownership, stemming mainly from concerns with durability and size, in addition to concerns over enhanced use cases.

“But our data also shows that when the consumers are able to use a foldable phone in hand, there is a solid reduction of doubt and concern about the concept. This means that the in-store experience may more important than ever in driving awareness, capabilities, and potential use cases.”

Said Paul Brown, Director, UXIP: “The big question is whether the perceived value will outweigh the added cost; and the initial response from consumers is ‘no.’ The ability for foldable displays to resolve real consumer pain-points is, in our view critical to whether these devices will become a niche segment of the smartphone market or the dominant form-factor of the future. Until costs come down, these devices will not take off.”

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Huawei puts $1-bn into local developer programme

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Huawei Mobile Services (HMS) South Africa has announced the launch of a local Developer Programme called Shining-Star. Huawei announced an investment of $1-billion in support of this programme across global markets, of which South Africa forms part.

‘‘HMS already has more than 570 million global users, including more than 15 million in Africa, with our business covering more than 170 countries,’’ says Likun Zhao, vice president of Huawei Consumer Business Group for Middle East and Africa. “We provide a trusted, device-centric and inter-connected eco-system that improves the user experience, helping them to discover quality content while ensuring security and privacy.”

The developer programme, announced at AfricaCom in Cape Town last week, is the first of its kind in South Africa. Huawei says it “will provide an encompassing eco-system that aims to encourage local developer innovation and support, while Huawei’s AppGallery provides a platform for developers to showcase and publish their apps”.

The platform offers open e-point access and intelligent global distribution for all apps, ranging from smart home, gaming and music to education and health-related apps.

The Shining-Star Programme has been successfully implemented in Malaysia, which has the highest number of Huawei users relative to other smartphone brands in this country. Like Malaysia, South Africa has a considerable number of Huawei users.

Shining-Star will focus on assisting local app developers who face challenges like lack of funding for app eco-systems, testing, and monetisation of their apps. South African developers particularly struggle to market their games and find investors.

“We are committed to working on empowering local app developers by offering them some much-needed infrastructure, guidance, skills and support to grow local talent,” said Zhao. “Our focus is to provide an open platform for developers that they can use to launch and market their apps, as well as give them extensive support in the form of technical development, testing, and legal and marketing tools.”

Huawei HMS Core is a hub with tools like the Account Kit, which enables users to access developers’ apps using Huawei IDs; Game Service, which enables game development; Location Kit, which provides developers with hybrid locations; Drive Kit, a data storage and management solution; and Map Kit, which offers customisation of map formats to developers.

In addition to these developer-specific tools, the Huawei HMS Core hub has growth enablers like the Push Kit and an Analytics Kit, which enable, respectively, the sending of messages and analysis of user behaviour. An Ad Kit and In-App Purchases Kit are also available, so developers can earn income from their apps. Key resources such as API reference, development guides and sample code assist are also part of the programme.

At present, more than 50,000 apps are connected to HMS Core worldwide.

* App developers with a completed app can visit https://developer.huawei.com/consumer/en/, or contact the Huawei SA Business Development team on developersa@huawei.com to find out how Huawei can support them.

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