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Home Blog Page 7763

OEM PC Vendors, Zinox and Omatek, Need Intervention To Survive

By
Tekedia Editors
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1

This completes the report we started before.

In the 2011 Nigerian Information Technology Exhibition (NITEX), it was very obvious that Nigeria has talents and businessmen and women that can execute at any level.

NITEX is the premier event for software developers, software architects, solution providers, OEMs, IT vendors etc. NITEX-2011 will serve as an excellent opportunity to promote latest technologies as they relate to organizations, ranging from SME’s, large enterprise and multinationals.

NITEX offered a window on what the challenges are in the nation. The PC industry in the nation has grown as more people continue to buy. Analysts have reported that the developing world will sustain the global PC growth despite the erosion of the market coming from tablets. In East Africa, the PC market is expected to grow by 75% largely due to Kenya.

In this midst, it looks very good because the industry is expanding. However, the local players in Nigeria are not smiling. Increasingly, the PC industry in Nigeria has turned to be a dumping ground. There are many international brands as we open our doors to electronics. And many people are going for cheaper products which in most cases seem affordable than even the local ones.

The government has written the policy to help the locally made products  but enforcing it is different from making it. It is not just computers, but software. Tekedia thinks that the only people that will save the industry is simply the government. The local OEMs have lost the public and it is going to be tough to get it back. They have to innovate in price and service to have a chance. Of course their scales are too small to compete with the behemoths like HP, Dell and Lenovo in the PC industry.

Tekedia thinks we must give credit to the local players for pushing and competing in a challenging environment like Nigeria. It is commendable that Zinox and Omatek have done well as they did. What they have to do now is to lobby government better to enforce the “Buy Nigeria” directive made in 2006 by the government in the software and hardware industry. SystemSpec the software company seems to be doing well as it is monopolizing many software contracts from the government.

A small history of the industry shows that though many started this business, only Zinox and Omatek are left behind. There are others, but their share is too small.  We recall the era of NEAT Computers in Port Harcourt, Brian Systems, Balogtek, among others. Right now, Zinox and Omatek with some other little brands are riding the waves. And they are having tough times.

Our data shows that if the government does not help the local OEM vendors in Nigeria, they will exit the stage for the foreign ones by 2017. Together, they are losing market share in the range of 5-7% annually. Zinox used to dominate up to 70% of the educational PC sector, that has come down to less than 50%. Obasanjo helped these companies as he promoted them, showed up in photos and we hope they will get help from the present admin which also has shown genuine interest in supporting local vendors in other areas. A good example is the Innoson Motors which the administration has visited and commended in many ways. Anything short, we will all be buying foreign.

 

—end–

 

 

 

 

Tekedia Intelligence Concludes That All Local PC Vendors in Nigeria Could Exit By 2017

By
Tekedia Editors
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0

 

In 2010, IDC reported thus:

 

The Q2 2010 IDC report posted on the company’s web site reveals that Zinox laptops are the fastest growing and best selling Notebooks in the Nigerian market. Zinox is strongest in the laptop market where it leads six other international brands, including HP, Acer, Toshiba, Dell, Lenovo and LG Electronics, with a 53.6% market share and a year-on-year growth of 799 per cent, while its closest competitor, HP, achieved a 23.6 per cent market share.

 

Yes, Zinox through government projects is doing well. It has found lucks in many of its no-compete bids and riding the wave. But do not be deceived, there is no major product innovation  going on n either Zinox or Omatek. Omatek trades as a junk stock in the Nigerian Stock Exchange and was losing money until it managed to come back in black in the last few quarters.

 

These companies had the best of intentions. They fought and gave this nation hope and identify, but their governments failed them. Nigeria is a dumping ground of PC and electronics. And that is the problem for the local players. How can you compete in a place where one foreigner buys a ticket , enters the nation and within an hour is smiling before compromised journalists that it has introduced a new PC line in Nigeria.

 

Immediately that happens, the market share of the local players are eroded. Zinox does not make much money in PC, it does through government deals like the INEC one. Omatek seems not to know how to get these jobs and by focusing on PC, it is having tough time.

 

As we look into this industry, we see challenges for the local OEMs (original equipment manufacturers)  – there is no benefit in making anything in Nigeria. They will surely collapse without any major intervention by the government. People think that PC is immune to the same conditions that forced Michelin out of making tires in Nigeria. No, the condition is the same. If you look at the business model of Zinox, you will notice that the bulk of its profit does not come from things that are made in Nigeria. The items it supplied INEC for the elections were not made in Nigeria. That business unit of PC that it makes in Nigeria is not a cash cow and that seems shaky right now.

 

Check back for the concluding part of this report.

 

Zinox is Nigeria’s No. 1 Selling Notebook, Says IDC

ISP Business Cools In Nigeria – 21 ISPs Operating With Expired Licenses

By
Tekedia Editors
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0

One thing has happened since competition went to the high temperature in the ICT sector in Nigeria: many local players went under. For anyone to tell you that business is booming for all the early investors in this sector, that person is not honest. The problem is simple: the ecosystem is difficult and extremely unfriendly.

 

Where do you start? You run a generator. You pay multiple taxes. You get nothing from the government.

 

This  is exactly what is happening in the Internet Service Providers business. They invested millions thinking that the future will be under then. It just the same thing that happened to the cybercafe. Of course we know what happened in the latter. When people began to have their phones as Internet hubs, the model of cybercafe was disrupted.

 

According to Vanguard, there are more than 21 ISPs that have gone under. Why not, these companies have no cybercafe to serve. People are getting the Internet via phones.

 

Already, about 21 Internet Service Providers were said to be operating illegally in the country due to expired licences. The licences granted to them in 2005 were only valid for five years, and many of them became invalid between December 2010 and April 2011. The ISPs currently find it hard to renew their licences.” he pointed out.

 

This calls into question vision and planning. What looks like a good business can be disrupted and that is why you need to have a strategy and stay in shape. And of course be adaptable. That is the only way of being sustainable.

SES Has Seven Satellites Serving Africa Now – Communication Simplified

By
Tekedia Editors
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0

SES is a world-leading telecommunications satellite operator, with a global fleet of more than 40 geostationary satellites that can reach 99% of the world’s population.

 

SES satellites are the world’s leading television distribution platform, broadcasting the equivalent of more than 100,000 hours of television programming every day, and providing vital communications services and broadband access to businesses and to government administrations worldwide.

 

SES operates mainly through SES ASTRA and SES WORLD SKIES and holds participations in satellite operators QuetzSat, Ciel, O3b Networks, YahLive and in a number of satellite service provision companies. More about us

 

With a global fleet of over 40 satellites, seven of which currently serve the African continent, SES delivers satellite-based solutions to broadcasters, content and internet service providers, mobile and fixed network operators, business and governmental organizations worldwide.

 

Editor’s Note: This is our focus on Africa – companies opening shops or creating businesses in Africa

Unbranded Handset Market Takes A Hit – It is Cooling in China. You Better Brand That Phone

By
Tekedia Editors
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0

We have reported that the world of tablet and phone will never work without branding. We believe that people that sell unbranded phones, though they may work, are not riding on a good business model. People do not use phones or tablets for just the usage, they associate the brands.

 

So after many months of growth, unbranded manufacturers or what the industry calls white-box  manufacturers  are taking a hit.  Nomura Equity Research concludes that the market is on slow down after China Mobile cancelled 90% of 12 million TD-SCDMA 3G handsets it once put in. People as they make money want to be associated with brands and not using a phone with no identify.

 

This is already calling for changes in quarterly estimates with  SIM Technology Group Ltd., one of the largest handset manufacturers in China, issuing a profit warning, saying it expects to make a loss in H1 of 2011.

 

Also another player in this sub-sector, Longcheer, have implemented significant employee layoffs recently, according to Nomura analyst Leping Huang. The company announced its first quarterly loss in eight years in the third fiscal quarter ended March 31, 2011. When the financial results were announced Deng Hua, CEO, commented: “The market for our mainstay feature phones products continue to remain challenging due to the excess capacity and adverse competition both upstream and downstream.”

 

At the same time China Mobile has reduced its requirement for TD-SCDMA handsets from 12 million handsets to 1.2 million, which is set to challenge handset design houses and OEMs that had been gearing up to meet orders, Nomura said.

 

So if you are in Lagos and you hope to get into this business, think again. It is far better to brand your product and give it an identity.

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