The world of PC peripherals is changing fast with analysts and industry experts highlighting the growth in demand for the innovations in the peripherals space. Peripherals vendors have quickly shifted their focus from traditional desktop PCs and laptops to creating a range of paraphernalia for smartphones, tablets and ultrabooks alike. From keyboards, mice and printers to docking stations and other accessories, the peripherals industry is experiencing a make-over.
Prasanna AR, sales manager, MEA, at G-Form says, “The demand for PC peripherals has always been in full throttle across today’s markets, with people expecting something new and exciting every time. This translates true to the saying that we cannot sail with old technologies for long. To be able to make your presence felt in today’s markets, companies need newer technologies and products. We are now in what experts refer to as the ‘Post-PC Era’ and we constantly push our design and engineering team to create the most innovative yet aesthetic accessories for smart phones and tablets. These devices are now part of our daily lives and even service providers are offering higher bandwidth and data packages to leverage on the demand for tablets and smartphones. These invaluable new tools can do everything to a point that it outperforms the traditional PC desktop and laptop. The numbers we see are really impressive and this is just the tip of the iceberg – this being a developing country, we see a huge number coming our way in the next few years.”
Many see Intel’s ultrabook push as creating room for a greater range of customised peripherals and the company recently reported that over a 100 peripherals based on the Thunderbolt connector technology will become available by the end of the year. “The number of Thunderbolt devices in the market will grow as the connector technology expands from Apple computers to Windows PCs. We have 21 Thunderbolt devices in things like storage and displays in the marketplace. We have a hundred targeted by the end of the year, and hundreds of Thunderbolt devices targeted by the middle or end of next year,” said Kirk Skaugen, corporate VP and GM of Intel’s PC Client Group, at a recent event in San Francisco.
A recent report by Euromonitor International made predictions specific to the UAE. “Computers and peripherals will increase in volume at a CAGR of 9% over the forecast period, while value sales will also grow at CAGR of 2%. This points to declining average unit prices across computers and peripherals as laptops, netbooks and desktops all approach maturity and even tablet PCs become more affordable following the launch of this category in 2010. The average unit price in tablets and other portable computers will decline from its peak of AED 2,700 in 2010 to as low as AED 890 by 2015 in constant value terms. Portable computers will continue to dominate computers and peripherals, with 2.4 million units expected to be sold in 2015 compared to just 176,000 desktops. 966,000 laptops will be sold during 2015, while 1.3 million tablets and other portable computers will be sold. Netbooks will lag far behind tablets and other portable computers with volume sales of 217,000 units in 2015,” the report said.
Crossing the hurdles
While analysts wait for the growth and innovation to come, vendors have already shifted their focused efforts in this area, crowding the market with products leaving distributors to battle the intense competition.
Distributors, on the other hand, are countering this competition by arming themselves with a selective portfolio of leading brands, investing in a skilled pool of resources and introducing bundled offers that gives customers access to a host of after sales support. Industry professionals believe that this strategy creates a positive vibe in the mind of the customer who then believes that the reseller is a specialist in the field and values his or her satisfaction.
Ehsan Hashemi, COO at Golden Systems Middle East (GSME) says, “Since the beginning of 2012 there have been major opportunities for computer peripherals and accessories as predicted by market analysts in the beginning of this year.
We feel distributors need to gear themselves with the right tools in order to be able to survive the rivalry. Distributors need to work on providing added value to partners by continuously offering enhanced after-sales services and support, sales and product training and compatible prices. The increased demand for mobility products, notebooks and tablets has elevated the demand for peripherals and accessories accordingly.
“The oversupply of peripherals in the market from different vendors has intensified the competition amongst distributors. GSME mainly focuses on quality products, which are more exclusive compared to the available stock in the market. We pride ourselves in the quality and the level of after sales service and support we offer our resellers. Further, we strongly believe in the value of effective partner training and education and place a huge emphasis on this practice. Moreover, due to overflow of the peripherals in the market we guarantee further support for our partners by offering them competitive offers on regular basis and incentives through our Avardz loyalty program.”
Mehdi Amjad, CEO of Almasa IT Distribution, adds another perspective: “It used to be the case that price would be the biggest differentiator between competitors, but with the rise in technology and the consumers maturing enough to know exactly what want, price competition has become thin. This is why our main focus at Almasa is services, with a high rate of downloading and sharing product turnover isn’t as high as it used to be now customers are looking for the best service that provides them with quick results. This also assists resellers in promising their customers reliable services and warranty’s that will create that bond between business and consumer.”
Riyaz Abdulla, regional sales director, Middle East and East Africa at Targus Middle East, says the company’s partners can leverage its product development strategy as a key differentiator that takes into account detailed customer insight and a thorough understanding of their needs.
Another hurdle that peripherals vendors and distributors face is associated with the burgeoning grey market and counterfeit trade. While the grey market can lead to losses in volumes through authorised channels, the import of fake products seriously hinders a customer’s perception of quality.
G- Form’s Prasanna agrees, “Everybody seems to believe in the maxim, ‘The whole world is manufactured in China.’ With this in mind, companies today worry about the looming issue that Chinese counterfeit products can simply take over the international markets. With most products manufactured in China—standard, quality and affordability stands out as factors that drive the competition. What sets our company and our products apart is our maintenance of ‘Standard Quality’ practices and the commitment to offer these products at an affordable price range, where the counterfeit competition dies by itself.”
According to him, the company is involved in a range of activities aimed at educating the company’s partners to help them gain a better understanding of the products that also gives them the confidence to go to market with G-Form’s latest launches. These initiatives include quarterly product reviews and brush up’s on both old and new line of products. G-Form has also assigned a product sales manager to the channel market who is a subject matter expert focused on the needs and requirements of the market.
“Over the last few years, we have encountered counterfeit Targus products on an ad hoc basis. In such cases, we try to work closely and in full cooperation with the UAE Economic Department, which is one of the leading government organisations spearheading the campaign to curb piracy and counterfeit activities. We are working closely with our channel partners, and keep a close eye on the market place for fake products,” says Abdulla.
He adds that the company protects its products by patents and has a strong legal team that follows up on violation of these patents.
GSME has invested in several measures such as after sales service and Return Material Authorisation (RMA). “All our products carry our company’s hologram. Resellers can only avail our after sales services and RMA provided that their products have our hologram. In addition, we work very closely with our vendors in order to provide attractive incentives for our loyal customers, thus encouraging them to exclusively promote genuine products,” says Hashemi.
Almasa’s Amjad has a positive opinion on the whole situation. “Although it is not of major concern to business it is something we at Almasa are aware of, it obviously has an effect on the market but it is very short term because once the customer has a bad experience with a counterfeit product they find it easier and better to go with the authentic version. The key to addressing the issue is to educate resellers on these products, what we do is sometimes purchase the counterfeit products and demonstrate to the resellers the major differences between real and fake. That then allows the reseller to educate the consumer on the cons of buying counterfeit products, with an emphasis on services that are non-existent when dealing with fake products,” says Amjad.
Industry experts say that times where competition is increasing and margins seem to be getting tighter, success depends on the reseller or distributor’s ability to reassign their focus to the fast selling products. With the industry heading down the route for mobility, resellers and distributors must now keep their eyes open for the needs that may not have been fulfilled yet. They must look to constantly innovate and improve the standards they have set.
“Selling everything and anything will not get you anywhere for it will only make it harder to focus on products that are making money. When selecting a vendor Almasa’s approach is to limit our selection to no more than two competitor vendors in a specific market segment. This allows our team to know our vendors products and to properly equip customers with peripherals that fit their needs. Secondly, we always look for vendors who plan for a long term commitment so that we can build that relationship over the years, as we have done with vendor partner Asus,” explains Amjad.
Prominent regional value added distributor, Redington Gulf has recently launched its Lifestyle Division which according to its GM, Saad Khan is the company’s initiative to capture the booming IT and electronics accessories market. “Simply put, this new division ventures out to be a strategic supply chain distributor connecting leading peripherals and accessories brands with the channel and retail partners across the Middle East. This division is a testament to the opportunity we see in the market,” says Khan.
According to Khan, the company sees the lack of a regular supply of products and stock availability. “Redington with its proven track record in both areas will be able to address this gap which will set Lifestyle apart from all its competitors. Our partners can leverage the dedicated sales team which will differentiate and complement the Lifestyle strategy.” The company has invested in a selective portfolio of brands that covers the various ecosystems such as home, office, car and personal gadgets such as tablets and smartphones.
Hashemi recommends resellers and distributors to practice creativity and go beyond the trading mentality to actually understand what the customer needs. He believes that as resellers of the products, they are in a position to enlighten the customer and correct them if their choice of product may not actually suit their need.
Promate follows the same strategy. Yasir Alkaar, director at Promate EMEA, says that the company is focused on the retail end of the market and thrives on creativity. “We are truly dedicated to delivering the most specialised and original electronics peripherals. We are equally devoted to finding an answer to each and every one of our consumer’s demands. Customisation is king, no single product is perfect and we at Promate are here to make sure the consumer has every available option they could wish for. We find a niche in the market or identify something that is lacking in a particular product and fill that gap,” Alkaar adds.
According to Alkaar, the company’s goal is to find the potential in a product, create something unique and offer that to the customer even before they know they want it. “We are a lifestyle technology brand and our USP is the way we bridge the gap between the technological latest and the day to day needs. Some companies are just manufacturers, others are simple lifestyle gurus, we are the link between the two and the way we seamlessly incorporate modern technology into a customer’s daily life marks us out as something special,” he states.
Seeing the current state of affairs both vendors and distributors are looking forward to the future in store, anticipating change for the better.
“The success of Apple and Samsung smart phones and tablets has had a very positive impact on our accessories growth in the region. This year, we are looking for continued growth based on additional launches from Apple and Samsung. In addition to all of this, we are eager to launch our home entertainment solutions in the near future which will be key to our success. The local demand and market response to our diverse lines of lifestyle products has been exceptional across the majority of the Middle East. We are keen to continue strengthening existing business in the region by developing the relationships we have formed with our local distributors,” says Youssef El-Arif, sales manager, MEA at Belkin.
“The peripheral market will continue to grow along with the rise in market demand. This market will remain to highly competitive due to the vast number of existing vendors and the new ones joining the stream. Our plan is to focus on exclusive products, increase our value added offerings, provide continuous high quality after sales service and educate our partners by conducting regular training sessions and seminars,” adds GSME’s Hashemi.
Targus’s Abdulla says that the peripherals industry is still growing with a bright future ahead as consumers have the tendency to own multiple accessories for the various devices they own. “From a global perspective, there are only a few markets that are showing positive growth and the Middle East and Africa region is one of these few regions that is showing positive growth in the economy. We are working towards capitalising on this and continue our investment in terms of resources and marketing initiatives to take advantage of this growth as we continue to penetrate in country across all the countries in the region,” he adds.
Amjad agrees stating that as technology is only getting smarter, consumers become increasingly dependent on their products to assist them in their everyday life which only means that this stream of business will continue to reap lucrative benefits. “Markets throughout the region are opening up and a surge of consumers are looking for the best products and solutions for their daily lives or business. That is why Almasa understands that the key to staying relevant and becoming a leader in the distribution market is to keep up with the trends, technology is evolving every day and so should the business around it,” he says.
“The UAE market is expected to grow by 20% as compared to 2011. Tablets and smartphones have replaced the bulky desktop computer and to a certain extent also the notebooks. This transition gives rise to an increase in both productivity and efficiencies. Etisalat alone holds around 3.5 million users, with du not being too far behind. Even if we compute a simple 10% of users choosing to purchase accessories or peripherals, we are still looking at big numbers. We are working on key tie ups with telecommunications companies and have invested in online marketing and are now keeoing our fingers crossed as we wait and watch,” concludes G-Form’s Prasanna. //