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

 

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

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