Drowning rand to impact PC prices

The PC market is facing declines. (Duncan Alfreds, Fin24)
The PC market is facing declines. (Duncan Alfreds, Fin24)

Cape Town – The declining rand could see a sharp increase in the price of laptops, says a local retailer.

“Since early September the rand has lost another 8% against the dollar, making it possible that laptop prices will be hiked from 15% this year to around 20%,” said Christopher Riley, CEO of The Notebook Company.

The South African currency was trading at R13.63 to the dollar on Friday, as it continued a slide from around R9.76 in 2013, according to figures from the South African Reserve Bank.

“We don’t import everything but the weak Rand is creating causing a tremendous pressure. I see prices going up to as much as 20%. We just cannot retain the import cost increase,” said Riley.

A price increase prior to the Christmas shopping season could well hurt consumer confidence, even as laptops themselves are stuck in a declining market.

Huge drop

According to the International Data Corporation (IDC), the PC market in the Middle East and Africa (MEA) suffered its worst ever decline in the second quarter of 2015.

IDC data showed that PCs declined by 25.6%, with notebooks suffering a 28.6% drop to 1.9 million units.

“Currency fluctuations both inside and outside the MEA region will remain largely responsible for the slower demand, particularly in key markets such as Turkey and Nigeria,” said Fouad Charakla, research manager for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey.

Riley said that retailers were under pressure to remain competitive as the rand's decline swallowed demand for new laptops.

“Right now, with the continued weakness of the rand, I do not see an upside. It is going to hurt consumers and they may cut back on buying – which will hurt the local market.”


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