By Andrew Seymour
Hold on tight and prepare to compete in a unified market place! Market dynamics in this region are changing at a phenomenal pace and the effects of true ICT convergence are now being widely seen in the Middle East channel.
There can be no doubt that the Middle East ICT channel is witnessing an unprecedented level of convergence between the traditional information technology sector and the consumer electronics market.
Not only is this shift reshaping the way that vendors across the wider technology industry engage with their channels, but it is forcing Middle East distributors and resellers to expand their outlook and exploit the opportunities that this dramatic development promises to bring.
Yes, I accept that these two channels have operated almost independently of each other in the past, but they have always been intrinsically linked. There are many reasons for this, not least the fact that suppliers in both the IT and electronics sectors share the same challenge of delivering cutting-edge products over and over again. Consumers of technology - whether at retail or commercial level - are a demanding bunch and this puts pressure on vendors to develop products that offer unparalleled performance at a competitive price. What's more, the routes that these vendors use to reach the market need to be efficient and knowledgeable. A broad range of vendors can be counted among the consumer electronics fraternity and yet so many of them have turned to conventional IT distribution companies for help in reaching the second tier. This trend has been evident in Europe in recent years and it is now reaching equal significance here in the Middle East and North Africa.
You only need to look back to last year's GITEX Shopper exhibition to appreciate that the convergence of IT and consumer electronics is in full swing. Many large retailers, including Jacky's Electronics, Plug-Ins and Jumbo Electronics, have diversified their offering to incorporate products that cater to the digital-hungry consumer. Mobile-based technology and accessories that blur the boundaries between classic entertainment hardware and PC products are now a standard feature in stores around the region. Indeed, the recent merger between mobile specialist i2 and PC retailer CompuMe emphasises the direction that the market is moving.
Developments at vendor level merely reiterate this point. For example, how would you describe Apple these days? As a manufacturer of computers or a consumer electronics vendor? Microsoft, too, is as renowned for its gaming consoles and efforts to crack the music market as it is for its office software. If you are still unconvinced then take a walk down Khalid Bin Al Waleed Road in Dubai or any other computer trading district in the region. I am sure you will soon discover that many resellers have balanced their IT portfolios with electronics or digital equipment. We are living in the era of the ‘Prosumer' and the channel must embrace it.
How this all plays out at distribution level is also going to make for interesting viewing. Several large distributors, such as Empa and Emitac, have revealed that they want to build up their retail presence in markets such as Saudi and the UAE this year.
How do they go about doing this? The simple answer is they need to start building brand portfolios that win them genuine credibility with retail accounts.
As the IT channel continues to engage with manufacturers from the consumer electronics sector, the two channels will become increasingly entwined and function as a unified entity.
Embrace the convergence!