Computer Global Market
Insights and Opportunities
Overview: Pakistan’s market for computers and peripherals has seen rapid growth during the past
4-5 years, and this trend is expected to continue. With virtually no tangible domestic production, the local computer and equipment market relies heavily on imports. The local market is generally receptive to U.S. brands, mainly for their quality and reliability, despite having strong competition from China, Japan, South Korea, and Taiwan. Major U.S. brands, including Dell, Hewlett Packard, Intel, Apple, and Cisco, have already established a strong presence in Pakistan.
The information technology industry in Pakistan has seen a robust growth during FY 2005-06, with computers and peripherals emerging as a major industry sector. Both the GOP and private businesses place high priority on the availability of computers and other IT equipment.
The GOP introduced its new Information Technology (IT) Policy in FY 2000, with major emphasis on computer availability, usage and manpower training. The GOP encourages the use of computer technology in both public and private institutions/organizations, and has introduced several incentives for both local and foreign firms including tax holidays, 100 percent equity ownership, and 100 percent remittance of profits.
In addition, the GOP, in collaboration with the private sector, has launched several projects to ensure the widespread availability of computers. Some of these initiatives include development of software technology parks, the provision of demand-based training, online accessibility of public utilities, research and development, federal and provincial government web portals, and digitization of government records.
The primary users for computers and peripherals in Pakistan are corporate businesses, IT and IT-enabled services companies, call centers, Internet Service Providers, government institutions, and domestic users. At present, there are 1,100 IT and IT enabled companies (100 companies with ISO-certification, 1 CMM Level-5, 1 CMM Level-4, 2 CMM Level-3, and 1 CMM Level-2), employing over 90,000 qualified IT professionals. Business Process Outsourcing (BPO), particularly the call center business, has emerged as a business sub-sector during the last two to three years.
There are presently 80 international and 30 domestic call centers operating in all major cities of the country. According to the latest industrial statistics, there are approximately 3,500 to 4,000 qualified professionals associated with this sector and this number is expected to grow at an annual rate of 60 percent in the coming years.
The majority of the international call centers operating in Pakistan are from the U.S. and the United Kingdom. During FY 2006, the cumulative outsourcing business in the country surpassed $10 million, and is expected to reach $20 million by the end of 2006.
According to the Pakistan Software Export Board (PSEB), the BPO business is expected to grow by at least 45 percent in the coming five years. The local demand for Internet and broadband services and its associated equipment has been very strong, as, at present, there are 127 ISPs operating countrywide, with total subscribers of approximately 2.5 million. Under the GOP’s broadband policy, the bandwidth tariff has been drastically reduced for high-speed Internet services, including DSL, VPN, ISDN, and wireless connections.
The local production capacity of computers and peripherals is marginal and currently meeting only 2 percent of the total industry demand. Three prominent local brands, including Mango PC, Inbox, and Raffles Systems, have established assembly lines in collaboration with foreign partners, and plans are underway to increase their production capacity.
Opportunities: Data Processing Machines/Main Frames; I/O Units – Tapes/Disks/Printers; Computer Networking Equipment; Personal Computers (Used/New); Servers/Gateways; Modems; Multiplexes
Power Supplies/Battery Chargers; Wires and Cables; Computer Leads; Cathode Ray Tube (CRT) Monitors; Liquid Crystal Display (LCD) Monitors; and Computer Laptops and hand held.
The past year has shown an increasing trend of computer users, especially at home, turning to used/refurbished computers. This has resulted in a large influx of used computers, both branded and unbranded, into the market. This trend has had only a minor impact on available international brands, however, as corporations still prefer new and branded equipment, and these corporations make up the bulk of the market.