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ITP.net: Arab Spring drives IT market growth

Intel says IT device purchases soared after unrest in several countries.
28.12.11 | Interesting article at ITP.net

The Arab Spring has driven IT market growth and connected device penetration in the Middle East region in 2011, according to Samir Al Schamma, general manager Middle East and North Africa, Intel, although overall PC penetration in the region remains low.

"The uprisings were a major driver for people wanting to have devices, we saw that in Egypt where the market dropped 40% [during the protests]. Today, almost a year later, demand is triple what it was and the reasons are that the people realised they want to be connected and want to be connected all the time, so netbooks and smartphones are getting the bulk of the share - even normal laptops, definitely at the expense of desktops," said Al Schamma.

The Arab Spring started in 2011 in Q1 in Egypt and Tunisia, and Intel was expecting a drop in the market because consumers stopped buying and the fall of the government meant no government enterprise buying, and no government tenders.

Intel predicted that consumers would return to purchasing IT products by the second half of the year and enterprises would begin purchasing once a stable government was in place.

"What we actually saw was consumer business return much, much faster and like I said, it is now three plus times higher than it was in Q1 and in fact even higher than it used to be before the revolution, so consumer demand is definitely there. Government and enterprise started to slowly come back, we saw that in Tunisia and Egypt, but we expect it to continue to be slow until there are more stable governments," said Al Schamma,

"In general, IT, whether you are looking at consumer or corporate, is one of those necessities that regardless of the situation, is a staple product that they need to get sooner or later."

According to Intel, the Middle East region is still behind in terms of PC penetration, although there has been some improvement with the development of broadband in some regions, but growth remains slow.

According to Al Schamma, PC demand year-on-year is much higher than in the past. The total available PC market between 2004 and 2010 more than tripled and Intel has forecast that by 2015 it will triple again.

"We are still at 20% PC penetration in the region and broadband is just starting out. There is more work to be done on broadband and wireless connectivity. We are seeing pretty much all the telecoms operators starting to realise that they have to have wireless broadband offerings. Nowadays most networks are 3G, although there are some WiMAX as well and we believe that once there is enough wireless broadband capacity, the floodgates will open for more users to be connected," said Al Schamma.

The development of relevant content also needs to be worked on in the region going forward, according to Intel.

While the numbers of companies that produce locally relevant content are increasing, they are still relatively low in terms of percentage of content providers compared to mature markets.

"With YouTube and Twitter and Facebook, people themselves are creating more and more relevant Arabic content, which is driving more and more people to consume the data and get devices," said Al Schamma.

Intel said that it saw growth in the first three quarters of 2011 in the Middle East, although not as much as was expected because of uprisings in the region.