PC sales slump in South Africa – MyBroadband

Computer sales in South Africa in the first half of 2024 were down significantly compared to the same period in 2023, according to major ICT hardware distributors in South Africa.

The declines have primarily been blamed on lower government spending and general economic and consumer uncertainty leading up to the national and provincial elections in May 2024.

Mustek brand executive Michael Kan said the company’s sales were significantly lower than in the first and second halves of 2023.

A significant portion of Mustek’s PC sales come from its public sector business.

“The 2024 elections resulted in a sharp decline in government spend, and therefore, our sales,” said Kan.

Another major distributor — Frontosa — also said sales had declined sharply due to elections and the delay in the appointment of President Cyril Ramaphosa’s cabinet, which was only finalised a month after voting day.

“This slowed everything down,” said Frontosa general manager Eddie Pio. “I feel consumer confidence was very low at the time, but will lift towards the end of the year,” Pio said.

Esquire Technologies general manager Kabir Ismail described the distributor’s sales as “steady” during the first half of 2024 and said the overall market showed signs of resilience.

The distributors observed several key trends in the first six months of the year.

Kan said one of the biggest trends in 2024 was manufacturers standardising and producing more AI-powered products.

However, South Africa is lagging behind global markets in the uptake of AI-focused PCs.

Ismail said although the local market’s trends largely aligned with global patterns, South African consumers were slower to upgrade their devices, in part due to economic constraints.

“As more affordable AI-driven models enter the market, we expect a gradual increase in adoption,” Ismail said.

When it comes to particular form factors, all three distributors said that notebooks remained in the highest demand — often at the expense of traditional desktop tower PCs.

“Laptops continue to dominate sales, fuelled by competitive pricing, evolving consumer needs, and the growing appeal of AI-enhanced features,” said Esquire.

However, Pio said although notebook demand was high, some customers were still hungry for the power offered by desktop systems.

He expects this category’s sales will climb towards the end of the year.

Esquire CEO Mahomed Cassim also said 2024 has been characterised by the growing dominance of multinational brands, which now account for 70% to 85% of the market.

This shows a significant shift away from the early days of the PC industry, where self-built machines were prevalent.

“The shift towards branded PCs highlights a growing preference for established brands that offer reliability, performance, and after-sales support,” Cassim said.

Turn of the tide for the rest of the year

Looking ahead, the distributors believe PC sales will improve by the end of 2024 despite continued consumer pressure.

“Indicators are that the double-digit decline in some market segments will turn into positive growth this year,” said Kan. “Even desktop sales are showing a potential growth.”

Kan said the installed base of PCs was ageing, with the bulk being over four years old and still running Windows 10.

The operating system’s official software update support is set to end in late 2025, leaving Windows 10 users without access to new features and potentially vulnerable to security threats.

“Windows 11 penetration is still low, creating significant refresh opportunities, especially in the commercial segment,” said Kan.

Cassim added that the anticipated shift towards AI-enhanced PCs was expected to stimulate market growth as consumers sought smarter performance and better integration with AI-driven applications.

He expressed optimism for the remainder of the year.

“The market dynamics are favourable, with strong consumer interest in the latest technologies and a competitive pricing landscape.

“However, we must also acknowledge the challenges, such as the lengthening upgrade cycle, which now extends beyond five years for many users.”

“This prolonged cycle reduces the frequency of purchases, putting pressure on distributors to find new ways to entice consumers into upgrading.”

Top-selling brands

MyBroadband also asked the distributors for their most popular computing brands in the first half of 2024.

Kan revealed that Mustek’s own Mecer brand, as well as Lenovo, Brother, Asus, and Huawei, were its top performers.

Ismail said Esquire’s top-selling brands in the first half of the year were Asus, Lenovo, HP, and Dell.

The success of the overall leader — Asus — was attributed to its strong line-up of gaming and high-performance models, which have resonated well with the South African market.

“The appeal of gaming PCs, in particular, has been bolstered by consumers who are willing to invest in machines that keep up with the latest advancements in graphics and processing power.”

In South Africa, just over a fifth of all consumer laptops purchased in 2024 were Asus devices.

Esquire said the brand’s focus on purpose-driven innovation has allowed it to dominate key price segments in the consumer laptop market.

“They produce laptops across a broad spectrum of customer segments, from entry-level to premium ranges like the ZenBook series, which recently saw significant uptake thanks to its OLED display upgrades.”

Frontosa’s most popular computer hardware brands were Corsair, Gigabyte, Kingston, Adata, In-Win, J5Create, Sunix, and Elgato.