COMPUTER sales in Slovakia rose sharply last year, with 'generics' leading the way.
photo: Ján Svrček
According to a study published in April by PC Revue magazine and the Trend economic weekly, sales in Slovakia of brand-name computers shot up by 53.4 per cent last year, and total computer sales for 2001 exceeded 196,000 units. Hardware sales world-wide fell by 6.7 per cent last year.
While large international manufacturers were the top three sellers in branded hardware, Slovakia's I.M. Computers saw sales grow by over 37 per cent on its domestically produced Libra brand.
"Libra is the largest Slovak brand in Slovakia, and last year it was fourth in sales, behind Compaq, IBM and HP," said IMC director Stanislav Fukna.
Nearly 64 per cent of computers sold in Slovakia are generics, most of which are assembled locally by small, regional suppliers.
Compaq Slovakia led the charge with sales growth of 65.3 per cent as it became the first hardware maker to surpass 25,000 units sold annually in Slovakia. Second-place IBM increased sales by 59.8 per cent to 10,370 units.
HP, which is nearing the end of a rancorous eight-month process of acquiring Compaq in an $18 billion deal, shot to third place in the Slovak market after increasing sales in 2001 by 155 per cent, to 7,769.
IMC, which was founded in 1991, has seen the third straight year of growth for its Libra desktop, assembled in Slovakia from components. Libra sales accounted for nearly 10 per cent of the Sk866 million in revenues last year for the company, whose main business is wholesale trade in computer components. In April the company received ISO 9001 quality certification.
Assembling computers is a common practice among dealers and enthusiasts, said Fukna, because of the significant price savings involved.
"In Slovakia there are many small firms - we call them 'garage firms' - who make a few computers. Only four or five firms make them in larger numbers," said Fukna.
A fully functional multi-media computer with monitor, speakers and accessories can be built for under Sk30,000 ($650), said Ivan Bendík from K-corp, a dealer in eastern Slovakia which sells computers assembled in its shop. A comparable PC from a brand like Compaq or IBM can cost up to a third more, he added.
Another advantage, said Bendík, is that each computer is custom built. "You come into the shop, tell us what you want, what you don't want. After about five days, you come back and the computer is ready."
By branding, IMC hopes to distinguish its Libra from generically assembled models, which, while being cheap, can vary widely in the quality of components used.
"When you want to evaluate a computer, you have to really look at the components; you have to look if an operating system is included, because from the garage firms, usually you don't get an operating system, or else the system is illegally installed," said Fukna.
Martin Kosorin, director of Shark Computers, said a big factor behind the sales growth was the introduction of instalment payment plans. "Instalment sales have strengthened the growth of the consumer market in Slovakia," said Kosorin, who said 60 per cent of Shark's sales are on instalment plans. Last year, Shark sold over 1,000 assembled computers, mostly to households.
At Sk30,000, a typical assembled computer represents just over 2.5 times the national average monthly wage at the end of 2001.
While pointing out that low-price computers had been sold mainly to price-sensitive home users, IMC also said that a computer is still beyond the means of many households.
"The prices for PCs are fine, but the buying power of people here is just not strong enough," said Fukna.
Dag Storrosten, managing director of Nextra, Slovakia's second largest Internet service provider, agreed. "If you compare with western Europe, prices are pretty good here, but they're still very costly compared to the overall standard of living."
Nevertheless, the outlook remains positive. In its analysis of the hardware market, PC Revue predicts 2002 growth of 20-30 per cent across the industry.
While a drop in state-sector sales is expected to decrease overall numbers in the run-up to parliamentary elections expected in September, the effects will not be as pronounced as before past elections due to the privatisation of banks, insurance providers and other large firms, says the report. In addition, accelerating economic growth of about 4 per cent this year should drive sales to households and small businesses.