2020 vision

If you looked at unit shipment data for the PC market that’s come out of the research houses over the last few years, you’d be asking for directions to the nearest bridge to jump off. But what do key industry players really think the state of the local PC market is today, and what does its medium-term future hold? Is there a continued downward trend ahead, or are things set to pick up?

Jonathan Young, head of product, Cloudware, believes the South African market isn’t down and out just yet. “We’re following global trends, and the trend is that the PC market is making a little bit of a comeback,” he says.

Software drives the sale

One factor forcing upgrades is hardware refreshment driven by Windows 10, and the forthcoming end of support for Windows 7.

“From a Windows 10 perspective, we’re expecting some rebound in the market,” says Colin Erasmus, OEM partner lead, Microsoft.

“A lot of corporates are still stuck on Windows 7,” notes Julian Pienaar, technical solutions advocate: Middle East and Africa, Lenovo. “That’s the challenge PC vendors have, because the next generation support is Windows 10 only. We have to explain to customers that while they have two to three years to move, if they don’t move in the next 18 months, they’ll have a problem, because the hardware isn’t going to support it at all.”

Erasmus adds: “From an enterprise perspective, we’re starting to see a lot of customers move to Windows 10 faster than they did from previous generations.”

Jamie Scott, executive director, Tarsus Distribution, believes that corporates haven’t been spending so freely recently due to political and economic uncertainty and have, on average, been extending the PC ownership cycle from three years to four.

Pienaar agrees: "People need to buy because the technology they’re using is old, and they’ve stretched it as far as they can. There will be a lot of ‘pushed’ purchases in the next two to three years, due to the necessity to upgrade."

Scott adds that when these enterprises are hitting the refresh point, some of the demanded key features will be, 'multiscreen support, unified communications, which requires good audio quality, and smaller form factors’. “There will be a move from bigger desktop PCs to tiny PCs that can be bolted on to the back of an HD monitor; they save power and save space,” he says.

Drive Control Corporation’s HP computing business unit manager, Francois van Wijk, highlights another technology feature that will spur PC refresh cycles – USB-C. “As it becomes more widespread, more applications will be USB-C-only. People will be forced to upgrade to devices that include USB-C, otherwise you won’t be able to use all the new peripherals being launched. Everything is moving to one cable for power, high-quality video and data," he says.

The game’s afoot

One market segment that knows a thing or two about the need to upgrade to the latest PC hardware to eke out competitive advantage is the gaming community.

Sebastian Isaac, business development manager, Rectron, says: “A lot of gamers buy new technology as it’s released, and are upgrading every two to three years.”

“People are spending money on custom machines, but it’s high-end stuff,” agrees Pienaar. “They’re getting not one or two, but three graphics cards, and as much memory as possible.”

“Gaming means computing power, better experience and design. You need the right tools and products. While it’s still a small market in South Africa, there are more and more players coming in, including HP,” notes David Rozzio, MD, HP Inc South Africa. “We see more traction in that space and I think gaming could represent about 25% to 30% of the consumer market.”

Both Rectron’s Isaac and Tarsus Distribution’s Scott agree that gaming notebooks are a key part of that growth area. “We’re seeing the R30 000 gaming notebook market as quite strong. There’s good growth, but we’re starting from a low base,” admits Scott.

Pushing reality

An upcoming technology area that’s linked to gaming, and is set to offer enterprise applications and will likely drive PC upgrades, is the push to virtual and augmented reality.

“From the consumer side, we’re starting to see augmented or mixed reality becoming a little more pervasive,” says Erasmus. “It is going to happen, but it’s going to take a little longer to start to see that.”

“New areas coming to market for us include gaming and content solutions – one aspect of that is blended reality. Microsoft and the HoloLens is one we know about, but HP is also looking at 3D scanning solutions. We think in the next three years, such technology and ways of driving things between the physical and digital worlds will play a big role in the innovation coming into the market through new form factors, and will drive the way we
use the PC,” says Rozzio.

It’s probably not possible to have a discussion with a panel of industry aficionados about the future of the PC market without form factor and function popping into the conversation at least once. The blossoming of smartphones and tablets has widened penetration of computing devices into the local market. But uncertainty remains over a single direction for the entire market. “Is it a form factor close to a phone, or to a tablet, or to a notebook?” asks Rozzio.

“Millennials predominantly use their smartphone, not a computer. In Africa, they went straight from the desktop to the mobile; they’ve skipped the notebook era,” says Pienaar.

The smartphone catalyst

Scott believes that the tablet and smartphone experience is helping to drive further uptake in the notebook market. “We’re starting to see people buying up in the form factors, as they’re accustomed to the user experience of a R15 000 smartphone and they’re used to the touchscreen. They don’t want to pick up a chunky laptop that takes five minutes to boot up. People investing in a smartphone feel more comfortable investing in a decent, slim notebook, with a good battery life, solid-state drive and a touchscreen,” says Scott.

Cloudware’s Young asks a valid question of this supposition: “In a tough economy, why are people still buying R20 000 notebooks when they can get away with a R5 000 model?”

Scott responds that the low price point marketplace still exists and will always be there. “Outside of the entry-level marketplace, however, the user experience needs to be the same across the laptop as the tablet and people are starting to move up their price points to look for the nicer features.”

Pride and status also play a part, adds Young. While this discussion point predominantly revolves around the consumer and BYOD space, the question remains about which form factors are currently selling in the enterprise.

“What isn’t selling, especially in the corporate environment, is tablets,” says Pienaar. “The convergence of the 2-in-1 convertible device is taking more share as people don’t want to carry and sync two devices; they just want to carry one. Today, people are carrying a mobile phone and a notebook – if they really have to.”

Different device types lend themselves to different functions, as Young so neatly captures it: “Working in anger, we feel passionately about a keyboard and mouse. Similarly, you can’t write a university thesis on a tablet. There are lots of things to do with form factor that we should be asking our customer what they want, and then design for them, rather than try to sell them what we think they want.”

Joy Downing, client solutions specialist, Dell EMC, raises the point that the engineering and manufacturing that goes into creating mass market devices adds a dose of reality to the innovation process. “From a Dell perspective, it’s around a form to fit. While the user has ideas of what things should look like, it doesn’t necessarily translate from an engineering perspective to provide the perfect solution for that environment. We’re trying to evolve our customers in terms of the usage model, but at the same time align them to what the latest technology looks like.”

So what’s the 2020 vision?

Looking ahead, there will be some movement in the form factors that will drive sales beyond the traditional PC market over the next three years. Isaac says: “Where we’re seeing growth in the computing business isn’t coming from business PCs, but from the Internet of Things, digital signage and video surveillance.”

Isaac also believes that as younger generations mature and move up the management hierarchy, there will be changes in the business demands from the more traditional PC market. "A lot of the old-school business owners expect a box on the desk, with a telephone alongside – that’s the conventional style of business management.

Over the next few years, we’ll see more shift in generations taking over company management, and then we’ll start seeing a lot of different types of technologies coming in,” he says.

Pieenar believes the form factors that will experience most growth locally are thin and light notebooks and convertible devices.

“Seventy percent of the ‘traditional’ notebooks sold in the next two years will be a convertible device, because people know touchscreens smartphones,” he says.

Scott forecasts a somewhat flat market ahead. “However, we will see some growth in the market in the number of units, and there will be some growth in the average selling price of PCs as well,” he says.

“The market has been stabilising," says Rozzio. "Our expectation is that the market will rebound in 2017, on the core PC and notebook side, and rebound even further in 2018. But it won’t be the high levels of growth we’ve seen in the past."

The outlook, it would seem, is that there are plenty of factors that will drive sales in the local market, and the future is somewhat positive. It’s just that the market isn’t quite so clear-cut in terms of form factor and function, as it used to be.


A regulatory hurdle

One issue that’s holding back the local PC market is the National Regulator for Compulsory Specifications. Its slow pace to approve letters of authorisation (LOA) means that new, innovative PC models aren’t entering the country as quickly as the industry would like. “Today, we’re suffering with the NRCS. We need to get products into the country in under six months,” says HP’s David Rozzio. “Six months in the IT environment is like ten years in a normalbusiness environment,” he says.

“The product lifecycles are shorter than the NRCS approval process,” says Tarsus Distribution’s Jamie Scott.

“Especially in the consumer space,” adds Lenovo’s Julian Pienaar. “You’ll go through two generations of machines before you get approval. Companies have closed down because they haven’t been able to bring products in due to the NRCS.”

Microsoft’s Colin Erasmus says: “An important thing to note is that they’re not breaking the SLA. The SLA is 180 days. It needs a policy change for quicker technology adoption.”