Expect to pay more for laptops as the rand weakens

 

The price of laptops in South Africa could rise as the rand continues to weaken against major international currencies, a retailer says

“The Notebook Company has been forced to up its prices this year. Due to the weakness of the rand against the dollar each shipment of computer goods needs to be considered to see if a price hike is required.  We don’t see the rand improving any time soon, so the prices of certain computer products will remain considerably higher than last year,” said Christopher Riley, CEO of The Notebook Company.

Riley added that the price of laptops and accessories had increased by 15% in recent years to make up for the falling local currency.

Over the past two years, the rand has depreciated from around R9.55/$1 to R11.94 on Monday. The price fluctuation hits retailers as most computer hardware in SA is imported.

“Some computer stock is flown in, and some is shipped in. When products are flown in, it is easy for vendors to adjust their prices timeously. But when they are shipped in the prices can be affected while the products are still at sea, meaning that computer vendors cannot always foresee higher costs,” Riley said.

He added that retailers often have to absorb squeezed profit margins as a result of these unforeseen price fluctuations.

“Vendors, in these instances, have to take a price knock until adjusting prices for the next shipment.”

The increase in price has seen sales stall as consumers decline to buy new laptops or delay purchases until the next version of Windows is officially launched.

The Notebook Company said that sales in the first three months of the year were flat compared to the same period in 2014. The depreciation has also had an impact on smartphone prices, forcing consumers to consider what they want versus what they can afford. Contract prices of premium phones have been trending upward from around R370 per month two years ago to around R500 this year.

“We do our best to mitigate against the weaker rand, primarily by leveraging Vodafone’s global purchasing strength. Having said that, any weakness in the rand does tend to translate into higher prices for the big name devices,” Vodacom executive head of media relations and social media Richard Boorman told Fin24recently.

But some manufacturers have seized the opportunity to offer lower-cost devices in an expanding mobile market. Companies like Huawei, Lenovo, Hisense and local player Mobicel have realised that cost is a major factor and market smartphones in SA directly at people who value affordability.

Data from the International Data Corporation (IDC) shows that smartphone growth hit a record 83% in the Middle East and Africa region, but price was a critical factor. Phones priced between $100 and $200 (R1 200 and R2 400) saw the largest surge in market share.

“Many new vendors have been eager to get into the region’s burgeoning smartphone space, with a number of them launching phones in this growing price band,” said Nabila Popal, IDC’s research manager for handsets and display solutions in the Middle East and Africa.

What would you pay for an Apple Watch?

How much would you be willing to pay for an Apple Smart watch? Would you pay R10 750 or R13 000? That is exactly what a South African paid for an aluminium and stainless steel piece respectively recently.

Offered on bidorbuy.co.za with a price tag of R9 000 and R11 000, the proud South African willingly paid for the exclusivity of owning the two brand new watches.

While the watch is set to take the world by storm,  there are some “dilemmas” with the gadgets and wearing them may not be as straight forward as some imagined. It appears as if a number of people’s high acidity levels have caused unwelcome skin reactions.

Apple’s website, although admitting to some problems, was also quick to point out that the device has been examined by certified dermatologists and users may be wearing it wrong.

In addition, apparently, some heart rate readings of tattooed consumers could potentially affect and play havoc with the smart watch’s mechanism, and social media sites were quick to pick up on the case with the hashtag #tattoogate as many frustrated consumers vented their annoyance.

Despite these hiccups, South Africans may overlook first generation flaws and purchase the device regardless.

“Apple loyalists are naturally going to love the smart watch. The watch’s release again represents a chance for Apple to change the world, again, with an industry-defining product,” said Christopher Riley, CEO of The Notebook Company.

The watch, not yet released in South Africa, has no local price tag or forthcoming launch date as yet. You can find the two bidorbuy listings here and here.

Tablet users to top 1bn this year

While the tablet market is cooling off from its highs of the past four years, more than 1-billion people worldwide will use a tablet in 2015.This is the word from Christopher Riley, CEO of The Notebook Company, who says: “While tablet sales accounted for more than half of The Notebook Company’s turnover from 2011-2013, we are now focusing on the sale of laptops – and we expect tablet sales to drop to around 10% of our sales during 2015.”

According to new figures from eMarketer, the 1-billion figure represents nearly 15% of the global population and more than double the number three years ago. By 2018, the number of tablet users in the world will reach 1,43-billion.

One of the key points raised by eMarketer is that the growth in the number of global tablet users will slow dramatically in 2015 – and continue to “taper off”. The total number of tablet users is expected to increase by 17.1% this year.

While this figure is still relatively robust, it is a long way behind year-over-year gains of 54,1% in 2013 and 29,1% in 2014. By 2018, the growth rate for new tablet users worldwide is expected to be just 7,9%.

Riley says that, during 2011 to 2013, tablet sales outstripped laptop sales at The Notebook Company. “We became one of the largest sellers of Apple iPads in SA during this period – as there was a strong demand from our users, something which was exacerbated by a shortage of stock. But our focus has now shifted back to the sale of laptops.”

He says the company is expecting an increase of 10% to 15% in laptop sales for the 2015 calendar year, compared to last year.

Paperless education ‘unlikely to succeed’

Paperless education ‘unlikely to succeed’

The Gauteng Education department’s plan to introduce a paperless education programme is ill-conceived, as there will simply not be enough funds to provide each pupil with a tablet or a laptop, says Christopher Riley, CEO of The Notebook Company.

Riley’s comments follow yesterday’s statement from Gauteng Education MEC Panyaza Lesufi, who said a number of schools in Tembisa are set to pilot a paperless education programme. 
He said the school would receive state-of-the-art Internet connections at no expense to government. The schools were also supplied with tablets and training to conduct lessons online.

“It is noble attempt, but I just don’t see how the government can afford all the tablets. Most students’ parents will certainly not be able to pay for tablets or laptops,” says Riley.

All text books are available online but, again, students need to own a laptop or tablet – as well as have an Internet connection – to access them.

“Introducing a paperless education system would certainly help to end the embarrassing non-delivery of school textbooks which have been plaguing the country for some time now. But it remains an unobtainable goal simply due to the cost of implementation. This could be summed up as a case of covering the problem of textbook delivery, rather than finding a solution,” he adds.

Loadshedding boosts Notebook Co’s business

During the last seven days, sales at The Notebook Company have dramatically increased as end-users replace PCs with laptops. 

Clients are also ordering large UPS units.
says Christopher Riley, CEO of The Notebook Company: “Companies and end users are shifting to laptops in order to work off the battery power during the ongoing loadshedding.

“Many of our clients – especially the small and medium businesses – are being hard-hit by the blackouts and have had no choice but to shift to laptops.

“We are currently heading for our best December – in terms of sales – for more than five years,” Riley says.
An increasing number of companies are also investing in generators as industry pundits report that loadshedding could last for the next five to 10 years – with a high probability that the situation might even worsen.

“The Eskom crisis might be benefiting us now,” says Riley. “But this will certainly not be the case in the medium to long term. 

In the final analysis this is terrible news for people and companies – and for the overall economy.”

Crawdaddys offers free WiFi - Provided by the notebook company

The Notebook Company has rolled out free WiFi connections at Crawdaddys in Centurion, Menlyn (Pretoria) and Rustenburg.

The company will also be installing WiFi at Tzaneen and at Silver Lakes, which will be opening next year. 

This comes on the back of the initial installation at Crawdaddys in Brooklyn, Pretoria.

Christopher Riley, CEO of The Notebook Company, says the WiFi hotspot at Crawdaddys Brooklyn outlet has been running since 2011. 

“It has definitely been good for business. 

Customers come in to use the WiFi and end up ordering drinks, or food and drinks, as well. 

A lot of these users are travelling businessmen, or business women.”

Patrons do not need a username or a password to connect to the network. 

This is because it can be a “real hassle” to log in with usernames and passwords.

“We have created a hassle-free WiFi environment where a user can be online within seconds. ”

SA to buck global tablet sales trend

While tablet sales were roaring during 2013, there are some market analysts, including IDC Corporation, which expect sales to drop significantly during 2014. South Africa could buck the trend, however.
At least one local notebook and tablet retailer, The Notebook Company, has said that local sales should improve “slightly”.

Christopher Riley, CEO of The Notebook Company, comments: “In a recent announcement, the IDC has stated that tablet sales will halve during 2014. Personally I just don’t see this happening – certainly not in South Africa, and certainly not at The Notebook Company.”
Riley says he expected his company’s tablet sales to increase by high single digits, “or possibly by double digits”.

‘We are fairly bullish about sales for this year. We are starting to leave the fumes of the global financial meltdown behind us – and I believe that, in itself, will play a part in more buoyant sales figures. Even if, globally, we see an increase in tablet sales during 2014, we are still seeing a growing market. It might be that it is just hard to emulate the sales during 2013, which were pretty good.”

According to the IDC, tablet sales reached 221-million units in 2013, up 54% on the previous year. But it said that this year’s sales will drop by as much as 22%, taking sales to 271-million units.

IDC also said that, by 2017, tablet sales would have slowed to single digit growth.
One of the reasons given for this decline is that consumers are opting for smartphones over smaller tablets.

Tom Mainelli, research director: tablets at IDC, says: “In the US, where tablets have been shipping in large volumes since 2010 – and are already well established -we’re less concerned about big phones cannibalising shipments and more worried about market saturation.”
It is further felt that, while consumer preferences have tended towards small tablets over the past 24 months, the rise of large phones could push consumers back towards larger tablets.

“The difference between a 6 inch smartphone and a 7-inch tablet isn’t great enough to warrant purchasing both,” Mainelli says.

But Riley insists that tablet sales will increase in South Africa during 2014 – and might even breach the double-digit mark. “We saw an increase in tablet and notebook sales in the last two quarters and we are expecting further sales growth during the next two quarters … we certainly see room for continued growth.”