SEO Tools comparison and reviews
PUSH TO START: Sales remain sluggish in the IT market as companies still have too much equipment left over from pre-crisis days.
KLAIPEDA - New high-tech gizmos may be quite expensive for many Lithuanians, who are generally cautious about novelties, but the sleek, smart and subtle gadgets do find their way into Lithuanian households these days. Not so quickly or easily as pre-2008 crisis, however.
According to research by Gfk Retail and Technology, an IT market research company, Lithuania falls behind regional neighbors in domestic appliance sales, but is number 1 in IT market growth. Thus, in 2010, according to the research company, IT product sales surged by 27.6 percent over 2009 numbers, while the growth in Latvia and Estonia was 13.5 and 11.5 percent, respectively. However, in the segment of electric appliance sales, the growth was only 15 percent in Lithuania last year, when in the other two Baltic countries it went up by 20.5 percent.
Some domestic electric appliance salespeople attributed the sluggish sales in the post-2008 crisis market not only to decreased domestic consumption because of increased unemployment and salary cuts, but also to some specific reasons such as an excess of these kinds of goods in the market. “The electronic goods’ abundance is due to the significant staff downsizing in many companies. Simply speaking, with many offices being empty or semi-empty, new appliances have become unnecessary. While most employers still have to pay them off, they also see no need in replacing them with up-to-date equipment. We all may wait for a better hiring time to see better computer sales,” Donatas Kazlauskas, a computer store owner in Vilnius, admitted to The Baltic Times.
Lithuania, industry experts maintain, has recently been through colossal changes in the IT product and domestic appliance segment. “2010 saw a very important shift – the redistributing of household electronic appliances in the Baltics. In 2009, the market share of audio and video equipment and other domestic equipment was equal – 26 percent each. However, in 2010, the audio and visual product sales grew 30 percent, while other appliance sales dropped by 5 percent. The gap is even larger in 2011, perhaps due to the European Basketball Championship in Lithuania, which boosted TV set sales,” says Eduardas Grybovas, head of Gfk Retail and Technology Baltic’s Vilnius office.
He adds that the sales increase was also partly due to the TV digitalization process. “Due to this, the sales of digital TV components went up by 151.4 percent in 2010, and kept rising at a faster rate in 2011,” the research company representative said. Lithuania is to complete its transition to digital TV before 2012, and the government is to cover installation of digital TV boxes for the poorest inhabitants.
Mobile phone sales was the market segment that exceeded all expectations, rising 27 percent in Lithuania last year, while smart phone sales skyrocketed by 455 percent, compared to 2009. The whole Baltic region saw a 23.9 percent increase in cell phone sales last year, and they have been on a constant growth this year as well.
“With mobile phones taking over many functions of audio and visual equipment, as well as domestic appliances, the trend just reflects what is happening in the world. Sure, we will soon see even a large wireless device penetration in our daily lives,” Kazlauskas says.
“Lithuania is not an exception in this regard, however, generally speaking, Lithuanians are cautious and, for the largest part, price-oriented consumers,” he added.
When it comes to computer sales, Hewlett-Packard (HP), the global computer sales leader, with a 17.7 percent share of the global pie, struggles in Lithuania. “Probably HP takes fourth, or even lower, ranking among the most popular laptop and [desktop] computer brands,” said Ovidijus Ramanauskas, owner of JSC Logoneta, which specializes in computer sales. He says Acer and Asus computers are the most-sought in Lithuania.
“Certainly, their price, not technical advancements, play a crucial role,” he says.
Numbers show that 19,300 Asus laptops were sold in Lithuania last year, chipping off 23.4 percent of the overall Lithuanian computer market. The runner-up was Dell, with 19 percent of the pie. Samsung clinched third spot, with a market share of 12.5 percent.
And where is the global leader? “It is hard to so why HP does not play the first fiddle in Lithuania. Obviously, for money-strapped Lithuanians, the computer’s price is the most important criterion, and these two brands are known for the best price-to-quality ratio. So, probably, their preference among the population is due to their success in product branding in Lithuania. Asus and Acer computers take up a significant part of our store shelves,” Ramanauskas said to The Baltic Times.
Tadas Goberis, HP sales head in Lithuania, predicts that HP computer sales will fully bounce back from the 2008 crisis only in 2012, but the income level will be considerably less than in 2008 due to a price decrease.
Gintaras Grybenas, Alna Intelligence director, says that moderately priced, average class computer equipment has been prevailing recently in the Lithuanian market. “Consumers often stick with moderate-cost netbooks instead of laptops and stationary computers, as the public sector opts for cheaper and average class stationary computers, while the business sector tends to go with cheaper and average class laptops,” Grybenas said.
Though overall computer sales have gone up this year, they are still behind the peak in the beginning of 2008. “The savings mode is still very obvious; however, the understanding of the advantages of new technologies and equipment is coming, as more and more entrepreneurs walk into the store wondering about process-optimizing IT programs, newer and more effective gadgets. With the overall decrease in IT equipment demand in recent years, demand for IT gadget repair services have increased significantly,” Kazlauskas notes.
Last year, he says, new Intel Core processors, as well as the new Windows 7 operating system were getting increasingly popular. He notes that cutting-edge 3D projectors and other kinds of solutions shape the trends this year. “The IT market prospects are upbeat. With the netbooks on the market, computer prices have gone down considerably and computers are becoming more and more accessible to many people in a wide range [purchasing power]. However, in the fall, with the heating season chipping away a large part of everyone’s income, there is some seasonal sluggishness in the market. Sure, the sales will spike during the Christmas season,” Ramanauskas said.
The latest technological leap, the tablet PC, a tablet-sized computer that has all the key features of a full-size personal computer, may be enthralling the world, but not Lithuanians. According to GfL Retail and Technology Baltic data, only approximately 3,000 tablet computers have been sold in Lithuania during 2011’s first half, far behind laptop computer sales. “It is really a small number. To compare, Lithuanians purchase roughly 6,000-7,000 laptops every month. It seems that tablet gadgets will not become every household’s choice any time soon.
The forecasts that tablets will become the third gadget for many, right behind mobile phones and laptops, are not most likely to come true any time soon. Lithuanian consumers are very pragmatic, mostly focusing on a product’s price. While a tablet costs 1,500-2,000 litas, most people will stick with laptops,” Grybovas noted.
He says the sluggish tablet start could be partly attributed to iPad2’s robust sales in the first half of the year. The iPad had already made its inroads in Western European, and even Estonian and Latvian, markets before taking off in Lithuania. “It proves that Lithuanians, in general, do not give into promotional commotion that lead new gadget massive marketing campaigns in the West,” the Gfl Retail and Technology representative stressed.
However, Ramanauskas maintains that, after the sluggish start, tablet computer sales have been picking up lately. “Though laptops still prevail, tablets are to throw serious competition at them in the near future. Price, however, will be the most determining factor in making the choice,” the entrepreneur says.
AVAD Baltic Director Tomas Palsis is convinced that iPad-like tablets will make a huge leap already next year. “We foresee tablet sales going as high as 50,000 units in the Baltics. We did not make up this number. The tablet computer belongs to a new product category, and it takes some time to rev up sales,” Palsis said.