Electronics Production | May 18, 2009
Low consumer confidence slows Bulgarian PC market to 3-Year Low in 2Q
Despite good results at the end of 2008, the Bulgarian PC market lost momentum in the first quarter of this year. According to the latest data from IDC, PC shipments grew only 3.5%, the worst result in three years, while revenues contracted 13.7% year on year.
"The weakening economic environment, including falling home and stock values, deteriorating industrial output, tightening credit, and resulting implications for trade and consumer spending, was clearly the dominant factor limiting growth," said Evelin Stoev, senior analyst, IDC Bulgaria. "Mini notebooks, vendor competition, price cuts, and post-Christmas promotions were simply not enough to overcome the economic tide, even with the market for mini notebooks taking off." Surprisingly, it was the notebook category as a whole that dragged the market down, with shipments of portable PCs growing 1.3% year on year, compared to a 58.3% year-on-year increase in 4Q08. Meanwhile, the price pressure on desktop PCs pushed volume up 5.9% from a year ago. However, the clear winner of this quarter was the x86 server segment, with shipments growing 16.9% year on year. "Price cuts and the transition to portables could not offset the crisis impact in 1Q," said Evelin Stoev. "The market has taken a serious hit and the competitive environment, along with the race to low-cost alternatives within the same product category, could easily undermine PC vendors' profits." The top 3 vendors — HP, Acer, and Toshiba — were responsible for more than a third of overall PC shipments. The home and SMB segments were among those less affected in 1Q. However, with difficult general elections expected in the summer, the PC business is facing a challenging environment, with a substantial reduction in spending among both consumer and commercial segments, amid tightening credit, eroding confidence, and growing unemployment. "The industry is resting its hopes on infrastructure building, public-sector spending, egovernance, and other development projects," Evelin Stoev added.
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