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Retailers are reluctant to take on more inventories after two quarters of market contraction

All three mobile device markets, mobile phones, tablets and notebooks, declined in the last two consecutive quarters of 2013. This is the first time this has happened in the history of the Australia/New Zealand mobile market. “While it is not surprising that the notebook market recorded another quarter of market contraction, the consecutive tightening of tablet and mobile phones market is a first for ANZ,” says senior analyst at IDC, Amy Cheah.

“This does not necessarily mean these markets have hit saturation point, but it may be an early indication of device fatigue and commoditization as these newer markets mature. For hardware vendors, it will be increasingly challenging to find differentiation, especially now with software vendors such as Microsoft and Google making a move into the hardware space,” she continued.

Demand for specific tablets and notebooks were weighed down by the softening Australian economy. Since Q4 last year, retailers have remained heavily stocked with inventory. However, the heavy spending at the end of the fiscal year of previous years did not materialize. This has made retailers and local channels reluctant to take in more inventories. They prefer to minimize their risk for the end of the next fiscal quarter.

Conversely, the New Zealand market for PCs showed improving business confidence and retail sales — recording 12% growth. Cheah says, “Acer was the standout vendor in the PC market in 2013 Q2. The vendor gained volume share through heavy discounting of its notebooks in retail, but at the cost of profitability. In the tablet market, demand for non-branded low-cost tablets has gradually waned since peaking last Christmas season.” She concludes, “Apple, on the other hand, continues to see its share eroded by Android tablets, particularly from Samsung, and increasingly Windows tablets.”

In 2013 Q2, the combination of 4.77 million desktops and mobile devices were shipped to the region. After several quarters of decline, the desktop market recorded an 8% sequential growth, tablets dipped 20% quarter-to-quarter, notebooks declined 6% and there was a decline of 5% in mobile phones and smartphones.

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