Lack of Political Stability Causes M-East Pinter Market To Stagnate

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Lack of Political Stability Causes Middle-East Pinter Market To  Stagnate
Lack of political stability causes MEA hardcopy peripherals market to stagnate for fifth consecutive quarter, says IDC
By IDC Middle East

The Middle East and Africa (MEA) hardcopy peripherals (HCP) market declined recorded a slight decline of 0.3% year on year in the second quarter of 2013 (Q2 2013), with shipments totaling 1,545,853 units, according to the latest figures from International Data Corporation (IDC), the world's premier IT and communications market intelligence and events firm. The market's revenue growth remained flat over the same period at 0.0%.

"The growth dynamics of the MEA market differed significantly in Q2 2013 from one country to another," says Mitri Roufka, IDC's research director for imaging, printing, and document solutions across the CEMA region. "Political instability in many countries across the region, the ongoing conflict in Syria, Iraq's deteriorating security and political situation, Iran's economic and political struggles, Nigeria's fundamentalist-fueled violence, and socioeconomic and political instability in North Africa are all inhibiting the rapid growth that this far-from-saturated region is capable of. Africa holds the highest growth potential, with an increasing number of manufacturers looking to gain a better foothold in the continent. This follows the emergence of a group of countries that are experiencing relatively solid political stability and strong economic performance, thereby presenting vendors with real long-term strong growth potential."

In Q2 2013, inkjet shipments in MEA declined 8.5% in volume and 4.2% in value, year on year. Inkjet vendors are increasingly being challenged by weak consumer demand and a strong preference among businesses and government entities for laser devices. As such, they are changing their strategies by gradually withdrawing from the extreme entry-level segment (as this segment is evidently not profitable for either hardware or cartridges), increasing their focus on higher-value devices that use less expensive consumables, and targeting the business segment by promoting inkjet technology as a reliable and cost-effective solution for general office printing needs.

In contrast with the inkjet segment, laser shipments grew in Q2 2013, expanding by 9.6% in volume and 2.5% in value. The growth of the color laser segment was twice as fast as the growth experienced in the mono laser segment. This was primarily driven by the strong performance of MFPs.

Looking at the first half of 2013, shipments of A3 devices in the color laser segment grew strongly at 10.4% year on year, while shipments of A4 color laser devices declined 5.3% over the same period; however, the opposite is true in the mono laser segment, where A3 shipments declined 5.8% year on year and A4 shipments increased 4.1%. Another interesting trend is that shipments of both inkjet and laser devices with no WiFi capability are declining, while shipments of WiFi-enabled inkjet and laser devices are growing. This is particularly true in the laser segment, where shipments of WiFi-enabled laser devices more than doubled compared to the first half of 2012. The same trend is taking place in terms of Web/Internet-enabled devices; however, IDC estimates that less than 20% of those devices are in reality actively utilizing this connectivity.

"The gradual shift to laser technology in MEA is not an exceptional trend for this region; it is actually in line with the worldwide trend," says Roufka. "However, in MEA, this trend is additionally fueled by the fact that demand for printing devices in the region has been driven primarily by the business and government segments (which opt mainly for laser technology), as the penetration of PCs in the home segment is low when compared to Europe, for example. This stems from the different socioeconomic challenges generally faced by home consumers across MEA, including low income levels, high unemployment, and high rates of illiteracy, particularly in Africa."

Another important point is that the relatively low adoption of electronic document processes and document solutions in the MEA business and government segments plays an important role in driving the continuously high requirement for and dependence on paper documents. This, in turn, drives demand for printing devices, and this is not very likely to change in the short or medium term, especially in Africa. "Assuming the political situation will eventually stabilize across the region, the Middle East and continues to harbor significant growth potential for printer manufacturers," adds Roufka.

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September 19, 2013 at 10:01 AM