Distributors bullish on tech market in SA

 ·2 Aug 2012
SA tech

Tech distributors are optimistic about the South African tech market, expecting stable demand and competitive pricing despite concerns over Europe and Asia.

Technology distributor, Esquire foresees a stable tech climate ahead in South Africa, but believes that companies will still need to exercise some caution when dealing as global economies are still unsettled after the recession.

“The technology landscape is fairly stable right now,” Esquire said. “Sure, there are no fireworks and many companies are sitting on their cash – if they have any – in an attempt to err on the side of caution as it is very difficult to predict where the economy is really going to go, what with the ongoing Euro crisis that continues to splutter along from one crisis to the next.”

Esquire remarked on concerns surrounding the Chinese economy, which has seen slowed growth in recent months.

“There are also concerns that China’s economy is over-heating – and China is an important factor for most technology companies. But the prospect of the China economy overheating has been a prospect that has been with us for some time now.”

“Barring a major shift, this should not have any material impact on the technology market as a whole from a global perspective – and certainly from a South African perspective.”

“With the ongoing uncertainty – and the hangover effect we are experiencing from the global recession – technology companies need to ensure that they provide innovative products and solutions to their clients at the right price.”

“Price/performance is an important factor.”

Buoyant demand

JSE-listed JD Group, the holding company of Incredible Connection and HiFi Corporation, was more optimistic on the South African tech market looking ahead at the rest of the year.

“We see the demand side remaining reasonably buoyant, particularly on the replacement side for CRT and computers,” said JD Group CEO, Grattan Kirk. “We also see prices in dollar terms remaining competitive as manufactures in the East improve on their efficiencies and shipping rates remain low.”

The group head also pointed to the launch of Windows 8 in October as something he expects will also assist with pushing demand for technology this year.

“Penetration level for technology remains relatively low in South Africa and in Southern Africa, so that is good for retailers such as ourselves. Apple products also enjoy strong demand, and as a rule, the other major manufacturers have a strong pipeline of product development.”

“Overall, we are feeling optimistic for the [tech] category.”

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