Computer Global Market
Insights and Opportunities
Overview: Imports of IT goods, computers, equipment and components to Norway have declined by a few percentage points in 2007 and 2008 from a peak in 2006. However, 2008 levels are higher than 2005 levels, and 2009 figures (not yet released) are likely to show an increase to 2006 levels or higher. Revenues of consumer electronics follow the same trend. 2009 figures, recently published, are down 11.5% from 2008.
Opportunities: Imports of computers and related equipment reached USD 2.4 billion in 2008. This is a decline both in import absolute size and share of total IT imports. Competition in the computer hardware market is tough and prices have decreased significantly since 2005, leaving lower margins for manufacturers.
For example, consumer priced laptop computers fell by 12% from 2005 to 2006. About 1.3 million units were sold in 2009, laptops and desktops combined (by a population of 4.8 million). HP has been the laptop and desktop market leader over the last couple of years, followed by Dell and Acer. Asus gained market share in 2009. The consumer electronics industry sold for some USD 4.5 billion in 2009, similar to 2006 revenues. Consumer AV equipment (HD TVs for the most part) experienced the greatest decline, whereas cell phone sales kept selling in a high pace. On average, Norwegians change their cell phones every other year.
Another trend is that Internet purchases of both hardware and software are taking a greater share of the market, at least within small and medium-sized companies, reducing the need for traditional dealers of IT equipment. In the offline market the two largest retailers have been growing, and some sources say they control over 70% of the market.
Based on per capita Internet access, Norway still ranks among the highest in the world and leads Europe in many vertical market segments. The most urban/central municipalities have the highest number of broadband subscriptions relative to the number of households. More than 90% of households (with children) now have access to personal computers and Internet. Cisco points out that 20 average Norwegian households (in 2008) consume bandwidth equivalent to all Internet traffic combined in 1995.
In the business market, server consolidation and various types of cloud computing will continue. Next generation of computing in Norway will see companies building systems based on a smaller number of large-capacity components as the price paid for capacity declines. A rapid need for capacity, smart firewalls and sophisticated storage solutions with differentiated accessibility to data is driving sales in this sector.
In a turbulent global economy, Norway may be somewhat of a safe haven for export companies. A wealthy public sector, a large surplus on national budgets, a dominant energy sector, a relatively sober banking system and one of the highest GDP per capita, make Norway better positioned than most other countries. Norway has only seen moderate effects of the global financial crisis. Norwegian end-users are technology-savvy, innovative, largely homogeneous, and are often among the first to try and adopt new technology. Norway is sometimes used as a test market for foreign manufacturer to effectively measure the potential of their new products due to the homogenous market.
The strongest present and future growth area in hardware will be data-storage as banks, e-businesses and transaction applications as service providers are required to store more and more of their clients’ data. EU directives may also require higher storage capabilities. On the consumer side, Norwegians are often innovators of new concepts and ideas and are able and willing to pay a premium for new high end products. Purchasing power is high, since most households benefit from low interest rate, high average income and low unemployment (3.2% in 2010)..