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Mustek looks forward to connectivity boom

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The expected growth in broadband availability – and a sharp decrease in telecommunications costs – will prove to be a major boost for South African hardware suppliers going forward.

This is according to Mustek, which today released its audited results.
Until now, the adoption of broadband connectivity in South Africa has been sluggish due to the high price of telecommunications, the group says in a statement. The computer hardware to required to get connected – essentially a PC and modem – is relatively cheap compared to the month-after-month costs of the present conenctivity options that South African consumers must use.
"However, the trenches that presently criss-cross South Africa`s major metropolitan areas offer daily evidence that our telecommunications providers are laying the groundwork for a major expansion of national broadband capacity," it states.
"Other wireless-based technologies such as WiMax are also being rolled out. In June 2009, Seacom's undersea fibre optic cable that connects several African countries to Europe is scheduled to come ashore at Mtunzini in KwaZulu-Natal. With this, the first of several planned private sector cables, broadband prices should fall sharply as the major providers compete for market share."
Mustek believes it is premature to predict the resulting pricing models, but is confident that falling telecommunications prices will enable many new broadband consumers to enter the market. Existing users will also be tempted to upgrade their hardware to take advantage of the high-speed broadband services, like streaming video, that will become more affordable.
"Notebooks such as the Eee PC at drastically reduced prices offer internet communications, office packages and video streaming and are sufficient for students, PC users on the move and the millions of would-be users that cannot afford regular computers," the statement continues.
"In the business environment, however, these energy-efficient and cheap machines are well positioned to take advantage of the trend toward 'cloud computing', in which data is managed and stored in distant servers rather than the actual machines."
Microsoft and Intel have announced the release of the "Netbook" (laptop) and "Nettop" (desktop) that stipulate maximum screen sizes, processing power and functionality. Intel consequently released its power-efficient and low-cost Atom microprocessor, which is designed specifically for these simple and affordable machines.
According to Mustek, this new category of machines is primarily aimed at would-be computer users (primarily in developing or third world countries) who cannot afford regular, full-featured computers; and computer users (primarily in developed or first world countries) who will buy second and affordable "carry around" machines that needn`t have all the functions and applications of their primary computers.
IDC predicts that by 2012 this category could grow to nine million users in developed economies alone. Intel itself projects that by 2011 the market for Netbooks will be 40-million units a year.
Mustek reported a successful year ended 30 June 2008.
It acquired 100% of Comztek Africa Zambia on 1 July 2007, 50% of Digital Surveillance Systems on 7 September 2008, 100% of Tier One Electronics on 1 March 2008 and disposed of Mecer Digital Do Brazil on 14 November 2007. The comparative income statement has been re-presented accordingly to disclose separately the subsidiary's results as discontinued operations. The group also classified its investment in Wavetrend Technologies.