It looks like there are tough times ahead for many computer companies as the fourth quarter progresses, with many believing sales will drop compared to the fourth quarter last year, or that earnings will be flat.
This is according to Christopher Riley, CEO of The Notebook Company, who says: “It seems a lot our clients are doing badly right now – and the bulk are SMEs. Sales are tepid and the higher prices of computer goods – mostly due to the weak rand – is not helping. Prices of laptops have increased by 10% over the past few months.
“Our clients, and local suppliers, are definitely on the negative side about prospects in the fourth quarter this year – and of the performance of the economy as a whole. Many are holding back on spending and this does not auger well for festive season sales in the computer industry.”
At the same time the economy is being threatened by a number of burning issues, he says. One of them is the recent student strike, with students demanding that there should be no increases in university fees next year.
There is also a possibility of a downgrade by ratings company Fitch later this year.
“This all adds to panic from the potential investors from abroad,” says Riley. “Many companies will be battening down the hatches over the festive season, including computer companies.”