The local computer market experienced double-digit growth last year, with the 1,29-million units sold generating revenue of R9,36bn.

Unit sales were up 10,9% from the previous year, but falling prices for imported equipment meant the actual cash value of the market rose a negligible 0,3%.

Analyst Hannes Fourie says that although desktop computer sales were flat, notebook and server sales more than compensated. Notebooks enjoyed a robust 36,9% increase in sales last year and consumer demand was unabated. More companies are buying portable computers as opposed to desktop models.

Although the sale of desktops still grew 9,8% compared with the previous year, the growth rate was less impressive than in previous years due to the shift towards portables and the slowing pace of corporate upgrading activity.

Demand from government and educational institutions dwindled last year, while consumer sales saw a massive leap of 61,4% in year-on-year growth. Fourie expects the consumer market to remain robust this year and the demand for notebooks from consumers and small businesses to continue unabated. "Falling prices will continue to stimulate new purchases and renewals," he says. David Kan, CEO of computer manufacturer Mustek, is even more upbeat.

Mustek declared a healthy interim dividend of 35c a share after its results for the six months to December 31 showed a 10% rise in sales for its best-selling Mecer computers. Kan says the IT industry is in a phase of transformation and growth, with several factors promising strong sales in the coming months.

Microsoft's next operating system should be released later this year under the name Vista. That will lead to a new wave of hardware purchases able to benefit from the better software performance, he says.

Slow but steady growth of broadband technologies in SA should also get a boost from the wireless Wi Max technology, which operators in SA are now exploring.

Intel will soon embed WiMax in its new computers, which will trigger another wave of buying as customers want PCs that automatically connect to wireless networks.

The corporate replacement cycle for computers that were last upgraded for Y2K also appears to be under way, although sales have not yet reached expected levels.

Local PC manufacturers also have a major opportunity to supply computers to thousands of schools in SA and Africa, while the low penetration rate for home computers also offers "huge potential for future sales," Kan says.

He hopes that Mecer computers bundled with educational software in all South African languages will be taken up en masse by the country's primary schools.

Business Day