In 2010 Bulgarian Hardware Market Began to Reboot
Since the beginning of 2009, when Bulgaria's economy started to feel the crisis, the domestic hardware market, along with many other segments, began its downturn. Within about a year and a half the segment got impacted by the negative economic phenomenon.
In late December 2010, independent agency CBN-Pannoff, Stoytcheff & Co. reported that after seven consecutive quarters of decline, Q3 2010 was the second consecutive quarter with growth in the computer hardware supply in the country.
Two other CBN studies, held previously in two of the three main hardware sale channels – dealers and retailers – indicate that both the results and attitudes for the whole 2010 were negative. This could mean that the goods in stock in the country had increased.
A more in-depth analysis of the results and trends in Q3 2010 and H1 2010 more clearly shows that Bulgarian computer hardware business, following the global market, has started to permanently alter its structure and priorities.
The entire local PC market in 2010 grew by 3.8% but failed to emerge from the crisis like the markets in most countries in Eastern Europe, according to IDC.
Notebook sales grew by 23.3% year-on-year in 2010 and even surpassed the pre-crisis level of 2008, IDC says. However, the annual demand for desktop computers dropped 29.4 percent and this slowed down the whole market.
According to new data from IDC, the local PC market continued to decline during the last calendar quarter of 2010, when it fell by 0.5% from the same period of 2009.
Demand for laptops continues to be a main driving force and the sales in this segment increased by 1.1% in the fourth quarter.
Although desktop computers sales registered a decline of 4.8% Q 4 2010 in contrast with the last three months of 2009, this type of computers performed better than than expected.
Hardware sales of export-oriented companies also went better in Q3 and Q4 2010, according to CBN.
A further data analysis
shows that end-users were the majority of the domestic PC buyers throughout the year. Also the average price of a laptop in Bulgaria fell below the average price for a desktop in some countries in Western Europe.
Consolidation on the Bulgarian PC market increases, and so the first three companies (HP, Acer and Dell) control nearly half of the entire computer market.
"The recovery of the market will not come if businesses and the government remain wary of investing in new computers,” said Evelin Stoev, senior analyst at IDC. “There was some movement at the end of 2010, but I expect it to really occur at the end of 2011 in parallel with the general economic recovery.”
CBN has recently predicted that the business segment in Bulgaria would be a significantly better hardware client in 2011 against home users. Namely business investments are the chances of growth in hardware sales.
Despite the sharp downturn of business capital investments in IT equipment in the last two years, these costs are expected to again go up with the support of EU programs.
However, home users' budgets have been shrinking due to the rising prices of basic beverages and services, and unemployment rates. Thus CBN analysts think end customers will probably not increase their purchases of hardware in 2011.
However, CBN says that sales growth is quite possible even in double digits, provided that hardware distributors and manufacturers adopt aggressive marketing strategies for their new hardware products and programs for technological innovation. These companies should seek to find healthy, working, growing and ready for investment organizations.