Desktops & Notebooks: SAARC Market: PC Penetration Rising

The client PC market in Pakistan, Bangladesh, and Sri Lanka totaled 393,184

units in the second half of 2005, thus bringing full year 2005 shipments to

851,735 units, representing a 16% growth for the year, according to IDC's

quarterly PC tracker on emerging Asian markets. With full year growth of 19%,

Pakistan boasted the highest growth rate among the three markets, while

Bangladesh and Sri Lanka achieved respectable 13% and 12% growth rates

respectively.

“Despite some dampeners in 2005, such as risky peace talks and the

after-effects of the tsunami, the PC market in Sri Lanka exhibited resiliency

largely due to public sector and non-government organization purchases,” said

Andrew Wong, Research Manager of Emerging Asia Countries Personal Systems

Research at IDC. “In Pakistan, encouraging government-led policies and

structural liberalization in the financial and telecommunications sectors helped

to lift the PC market there. Bangladesh, on the other hand, was relatively

unaffected by the influx of second-hand PCs, thus allowing the market to move

ahead.”

Future Outlook



The challenges in these countries are numerous, yet they present many

opportunities for current vendors and potential new entrants. Over the long

term, IDC predicts that the compounded annual growth rate from 2006-2010 for

Pakistan, Bangladesh and Sri Lanka will reach 19%, 22%, and 11% respectively,

largely driven by public sector purchases, as well as the telecommunications and

financial services sectors.

“The compounded annual growth rates expected in these three countries make

the rest of the APEJ market look dull in comparison,” says Bryan Ma, Associate

Director of Asia/Pacific Personal Systems Research at IDC. “In fact,

Pakistan's total market size could exceed the much more developed Singapore PC

market in absolute terms as early as 2007.”

Still, vendors will face wild cards from the political, social, and economic

angles. Faced with a delicate balancing act in ensuring sustainable business

models, vendors should strengthen partnerships with the local vendors or

channels, especially when pursuing the government, education and financial

sectors. For instance, multinational vendors in Sri Lanka can partner with a

local system integrator or value-added reseller to reduce costs and to get

access to government contracts. This approach can be especially useful for

vendors who wish to venture into this market in the midst of a rapidly changing

environment.

Competitive Analysis



In Pakistan, local branded PC vendors such as In-Box and Raffles achieved

commendable market share in the past year by banking on government and education

projects. But multinational PC vendor HP grew 38.5% year-on-year to take the top

spot in Sri Lanka in 2005 thanks to projects in the government, corporate, and

education sectors. Similarly, HP overtook local incumbent Daffodil for the top

spot in Bangladesh in 2005, where the government, education, finance, and

agriculture sectors generated multiple small-scale projects throughout the year.

Source: IDC PC tracker on emerging market