Video | Business Headlines | Internet | Science | Scientific Ethics | Technology | Search

 

IDC Insight - New Zealand PC Market

IDC Insight - New Zealand PC Market

Alysha Buckley

This event flash provides an insight into the market conditions that have contributed to the recent announcement by The PC Company that they are calling in the receivers and have permanently ceased trading.

S I T U A T I O N O V E R V I EW

The PC Company, New Zealand's largest local PC assembler, announced today that it had ceased trading and was calling in receivers after failing to secure a financial partner. The PC Company enjoyed a strong position in the New Zealand consumer desktop market, consistently ranking in the top 5 vendors. In 2001 The PC Company's market share was just under 7% of the total New Zealand PC market. Competition in New Zealand has been fierce, and New Zealand's price sensitive market has reacted positively to the continual decline of PC prices.

The 'low cost' PC drove consumer unit sales with the arrival of competitively priced sub-NZ$2,000 PCscanner- inkjet bundles. Most aggressive were HP and The PC Company, selling through the Pacific Retail Group and Farmers respectively. These competitively priced bundles saw a large increase in shipments to the consumer desktop market in early 2002. This market is now close to saturation in New Zealand, however short PC lifecycles ensure that there is still opportunity for repeat sales into the market. As 'new and exciting' technology drivers for the desktop PC market become fewer and fewer, the 'low cost' PC is emerging in New Zealand as one way for vendors to continue to drive unit sales.

The rising New Zealand dollar throughout 2002 and into 2003 allowed PC vendors to aggressively price their offerings, (as displayed above) although the larger companies with therefore better economies of scale were able to take full advantage of this. In New Zealand, this led to significant decrease in the ASP (Average Selling Price) – from $4142.39 in Q2 2001, to $2470.08 as at Q2 2003. In the event that sales volumes had increased at a relatively similar pace, this price drop would not have had the same impact, however growth in the New Zealand PC market was 8.6% 2001 to 2002, and IDC forecasts growth of 6.4% for 2003 over 2002.

F U T U R E O U T L O O K

Despite the announcement by The PC Company, IDC believes there is still opportunity for growth within the New Zealand PC market; The personal computer market in New Zealand predominantly consists of replacement purchasing. Y2K replacement cycles are expected to commence during 2003, however rather than the large spike once expected, shipments are likely to be staggered throughout the year, continuing even into 2004.

A key opportunity in this environment lies in the growing portables market. IDC expects corporates will increasingly choose to replace ageing desktops with notebooks, particularly as pricing drops and the gap in power and functionality between a desktop and a portable PC shrinks.

In the increasingly saturated consumer PC market, the portables market also offers opportunities to vendors who play in this area. The next stage in the maturity of the consumer PC market is the transition towards mobile computing. Many home users now have experience in purchasing a desktop PC - which could be considered as the most complex household appliance available. Over the same period, the price has decreased and performance has increased exponentially, providing second-time PC buyers with more justification for purchasing a portable PC.

IDC is forecasting growth for the New Zealand PC market at 7.2% CAGR to 2007, primarily driven by 14.5% growth in mobile PC's. Whilst there is no indication of price decreases slowing, there must be a point at which the PC cost cannot drop below without it becoming unprofitable.

IDC contends that as the market continues to develop both ASP's and sales will eventually stabilize. The demise of assemblers and vendors will be a natural evolution of the continually changing New Zealand PC market and the closure of The PC Company should not be seen as an indication of the overall PC market in New Zealand.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>