Untapped PC market opportunities lie in Pakistan, Sri Lanka, and Bangladesh, says IDC

IDC's quarterly PC tracker on emerging Asian markets shows that 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.

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.


Pakistan, Sri Lanka and Bangladesh Client PC Shipments by Top 3 Vendors, 2004 and 2005


  


Source: IDC, March 2006


Sri Lanka, Pakistan and Bangladesh Client PC Unit Shipment Forecast, 2005-2010

  

Source: IDC, March 2006

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