Telecom
Lenovo Maintains Status as Top OEM in the Traditional PC Space Ahead of HP, Dell & Apple
Preliminary results from International Data Corporation’s Worldwide Quarterly Personal Computing Device Tracker for the fourth quarter of 2018 (4Q18) shows shipments of traditional PCs (desktop, notebook, and workstation) totaled just over 68.1 million units, marking a decline of 3.7% in year-on-year terms.
The results slightly outperformed the forecast, which called for a decline of 4.7%, but also produced the largest year-on-year decline since the third quarter of 2016 (3Q16) and capped the full year at a nearly flat rate of -0.4%.
Heading into the quarter there was industry-wide concern over processor shortages and rising economic tensions between the U.S. and China.
Aggressive stocking of inventory during the previous quarter (3Q18) in anticipation of the shortage led to some sell-through challenges, driving a reduction of Q4 shipments in some regions.
The fourth quarter is typically oriented toward consumer promotions that help drive the industry’s biggest quarter of the year, but the confluence of events in 2018 led to the lowest sequential growth for a holiday quarter since the fourth quarter of 2012.
Nonetheless, the market performed better than expected, with corporate PC refresh – driven by the looming Windows 7 end of life (EOL) in January 2020 – helping to offset consumer market challenges.
Japan had an especially strong quarter driven by commercial refresh, which lifted virtually all aspects of the market.
All regions except the U.S. exceeded the forecast, although Asia/Pacific (excluding Japan) faced challenges from a difficult Chinese commercial environment.
Maciek Gornicki, research manager with IDC’s Asia/Pacific Client Devices Group,said “The ongoing economic tensions between China and the United States continue to create a lot of uncertainty in the business environment in China.
“As demand for Chinese products in the U.S. drops, this particularly impacts businesses of all sizes from the manufacturing sector in China, which, in turn, translates to a drop in IT purchases by these companies.
“As a result, the PC market in China is expected to suffer bigger declines throughout the year.
“And if the trade war escalates further, we should expect spillover of the impact to other countries, particularly due to the expected fluctuations of the exchange rates impacting businesses across the region.”
Neha Mahajan, senior research analyst with IDC’s Devices and Displays Group, said “As the U.S. PC market, especially the lower-end, continued to suffer from the ongoing shortfall of Intel CPUs, overall PC sales took a hit during the fourth quarter of 2018.
“While the processor supply challenges are expected to continue into the first two quarters of 2019, PC makers are likely to see the situation improve before the back-to-school season begins during the latter half of the year.”
Regional Highlights shows that the traditional PC market in the U.S. saw a modest uptick in volume from the year prior.
Total shipments for the quarter reached 16.7 million units, which was slightly below forecast.
Commercial shipments remained fairly robust during the quarter, thanks to the ongoing Windows 10 refresh cycle.
While market leader HP saw its year-over-year volumes modestly decline (despite a quarter-over-quarter improvement), the other top five vendors mostly saw volumes improve.
Europe, Middle East and Africa (EMEA): The traditional PC market was negative in 4Q18 for the first time in six quarters with both desktop and notebooks reporting a moderate decline.
This weakening of the market stemmed from the ongoing component shortages and was further impacted by a level of disruption and uncertainty arising from challenging geopolitical and economic scenarios within major economies in the region.
Asia/Pacific (excluding Japan) (APeJ): The traditional PC market in APeJ posted a single-digit decline in 4Q18, which was relatively close to IDC’s forecast.
Overstock in the channels, coupled with Intel CPU shortages, impacted sell-in across the region.
In India, a significant drop in consumer demand together with high inventory remaining in the channels led to a stronger than expected decline in the consumer and SMB segments, while Intel supply shortages led to a drop in sales to the enterprise customers.
In China, the commercial PC market came in below expectations, impacted by Intel CPU shortages and slowness in spending from the public sector, while U.S.-China trade issues had a negative effect on demand from the private sector.
Japan: Corporate Windows 10 refresh entered its final phase and helped to beat expectations for 4Q18, with growth among virtually all OEMs, although multinational OEMs reaped most of the benefits.
While Company Highlights reveals that Lenovo maintained its status as the top OEM in the traditional PC space, and one of only two top 5 companies to post growth in the quarter compared to a year ago. Its U.S. operation continued to recover from a year ago.
In APeJ, Lenovo felt increased pressure from HP and Dell, and posted the largest decline within the region among the three vendors.
HP Inc. declined 3.2% worldwide mostly due to a challenging quarter in the Americas.
The company fell below market growth in the U.S. where unfavorable comparisons arose due to strong results in 4Q17.
At the same time the company weathered the APeJ market slide better than many of its rivals and tieda with Lenovo in global market share for all of 2018.
Dell Inc. had the strongest year-on-year growth among the top OEMs at 1.6% for the quarter and ended 2018 growing 5.6% over 2017, also the strongest among the top OEMs.
Apple remained in the fourth position with market share of 7.2% and year-on-year growth of -3.8%. Both desktop and notebook shipments saw year-on-year declines in 4Q18.
Acer Group took fifth place with market share of 6.7% and a year-on-year decline of 8.5%. Acer continues to compete in the gaming space, which remains a big focus for the company in 2019, but challenges within the component constraints likely affected its overall consumer business in 4Q18.
A recent Groupe Spécial Mobile Association (GSMA) digital economy report has cast a spotlight on the significant contributions of Nigeria’s telecom sector to the nation’s GDP, highlighting its crucial role in driving economic growth and development.
Released amidst growing interest in the Nigerian telecom landscape, the report provides a comprehensive analysis of the sector’s impact on the country’s economic metrics. Key findings reveal that in 2023 alone, the telecom sector directly contributed 8% to Nigeria’s total GDP. However, when factoring in the wider ICT industries’ value-added contributions, this figure surged to an impressive 13.5%.
Beyond mere numbers, the report delves into the intricacies of the telecom sector’s influence on various economic sectors. It elucidates how the mobile industry’s cumulative contribution to Nigeria’s GDP reached an estimated 20 trillion NGN in 2023, accompanied by substantial tax revenue contributions totalling 2.8 trillion NGN. Such figures further highlight the sector’s role in driving fiscal revenues and national economic stability.
Moreover, the report sheds light on the transformative potential of the telecom sector in enabling digitalisation across key industries. Projections indicate that by 2028, sectors such as agriculture, manufacturing, transport, trade, and government are poised to witness a remarkable GDP increase of approximately 2 percentage points.
This surge is expected to generate an additional NGN 1.6 trillion in tax revenue, marking a significant milestone in Nigeria’s quest for economic diversification and resilience.
“The telecommunications sector is the backbone of the digital economy. We have a strong appreciation of the fact that if we are able to improve the business environment and invest in the sector, we can continue to improve the level of productivity.
A country like Nigeria has significant opportunities to contribute to the world, but this is impossible without diversifying the economy”. Dr. Bosun Tijani, Minister of Communications, Innovation and Digital Economy added.
The report also highlights the vital role of 5G networks in enhancing operational efficiency across sectors through real-time data transmission and remote monitoring.
It spotlights the immense potential of digitalisation in sectors like manufacturing and trade, with the capacity to add trillions in industry value and generate substantial employment opportunities and tax revenues.
Despite these promising revelations, the report also acknowledges the challenges faced by the telecom sector, particularly its capital-intensive nature.
The report’s findings beckon a clarion call for concerted efforts to leverage the telecom sector’s potential as a catalyst for economic advancement. With the right policies and investments, Nigeria stands poised to harness the full spectrum of opportunities offered by its vibrant telecom landscape, driving inclusive growth and prosperity for all.
While the advocacy for tariff increase remains under deliberations, revelations in the latest Groupe Spécial Mobile Association (GSMA) digital economy report have watered the ground for an increased tariff increase advocacy. The report, offering a deep dive into the sector’s dynamics, provides compelling arguments for adjusting tariffs to ensure sustainability and growth.
L-R: Juergen Peschel, Chief Executive Officer, 9Mobile; Dr. Bosun Tijani, Honourable Minister of Communications, Innovation, & Digital Economy; Dr. Aminu Maida, Executive Vice Chairman, Nigerian Communications Commission; Gbenga Adebayo, Association of Licensed Telecommunications Operators of Nigeria (ALTON); Bella Disu, Executive Vice Chairperson, Globacom; Karl Toriola, Chief Executive Officer, MTN; Angela Wamola, Head of Sub-Saharan Africa, GSM Association (GSMA); Ibrahim Dikko, Chief Executive Officer, Backbone Connectivity Networks Nig. Ltd.; at the GSMA Nigeria Digital Economy Report launch in Abuja on May 9 2024.
Highlighted in the report is the telecom sector’s significant contribution to Nigeria’s GDP. In 2023 alone, it accounted for 8% of the nation’s total GDP, a figure that swelled to 13.5% when considering the broader ICT ecosystem. The mobile industry’s overall contribution to GDP was estimated at a staggering 20 trillion NGN, with substantial tax revenues of 2.8 trillion NGN.
The sector’s potential to drive digitalisation across various domains is of paramount importance. The report projects a significant boost in GDP across sectors like agriculture, manufacturing, transport, trade, and government, translating into nearly 2 million jobs and an additional NGN 1.6 trillion in tax revenues by 2028.
The promise of 5G networks is poised to revolutionise operations, particularly in critical sectors like oil and mining, with real-time data transmission and remote monitoring enhancing efficiency. Digitalisation, especially in manufacturing and trade, holds immense potential for value addition and job creation, promising billions in additional tax revenues.
Despite Nigeria’s noteworthy internet usage figures, with 29% of the population regularly online, the sector faces challenges. The country boasts the lowest-cost data baskets in Africa, yet maintaining competitive mobile data network speeds remains essential. With an average speed of 21Mbps, Nigeria’s performance is comparable to neighbouring countries, underscoring the need for sustained investments.
However, sustaining this growth requires recognizing the capital-intensive nature of the telecom sector. Operators must continually invest in network maintenance and expansion, necessitating a conducive regulatory environment that ensures fair returns on investments.
Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, commenting during the report launch, said, “We raised several issues on the state of affairs of the telecom industry, and among the challenges articulated is the return on investment, stability of the infrastructure and the need for pricing rights. As an ecosystem, tariff hike is one of the sensitive issues affecting the telecom sector and has to be addressed by all stakeholders. We need to look at the state of affairs of the industry and examine holistically. There are ongoing obligations to our end users including infrastructure security. Tariff increase is a solution to solve multiple challenges of the telecom industry.“
The GSMA report positions the ongoing tariff adjustment deliberations as a strategic move to secure the sector’s long-term viability. With Nigeria’s digital future at stake, finding a balance between affordability for consumers and sustainability for operators is paramount to ensure continued growth and innovation in the telecom landscape.
Gbenga Adebayo, chairman, Association of Licensed Telecom Operators of Nigeria (ALTON) has said the telecoms sector should not be a palliative to solve economic woes.
Gbenga Adebayo, chairman of ALTON,
He made this call during his address at the Groupe Spécial Mobile Association (GSMA) digital economy report launch which took place in Abuja.
According to Adebayo, the telecom industry faces numerous challenges that hinder its growth and development.
He emphasized the need for sustainable investment, effective regulation, and a conducive business environment to drive progress.
The GSMA digital report, launched May 9th 2024, 2024, highlights the telecom’s 8 percent contribution to Nigeria’s GDP and 13.5% when considering the broader ICT ecosystem.
The report also highlights the significant challenges plaguing the industry including investment challenges, right of way, multiple taxation, and regulation.
Adebayo highlighted the existence of over 45 associated charges and levies on operators, despite the supposed removal of right of way costs.
He said that it creates an unfavorable business environment, discouraging investment and hindering the industry’s ability to deliver quality services.
He also stressed that regulatory interference and the lack of independence for the regulator exacerbate the problem.
The price review should be a simple regulatory process.
The public debate this has gained makes it appear the industry is insensitive to people’s concern.
“While the government tries to provide incentives for the public on account of ongoing macroeconomic headwinds, the telecoms sector should not be used as a palliative to solve the people’s problem. We must price right to sustain the industry; we must price right to have the right investment,” , Adebayo said.
He concluded that the industry must be allowed to operate sustainably, with the right investment and regulation, to deliver quality services and drive economic progress; encouraging stakeholders, including policymakers, regulators, and operators, to work together to address the challenges facing the industry, in order to drive economic growth, and fulfill its potential as a critical sector in Nigeria’s economy.
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