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Expanding the hardware sector

Expanding the hardware sector

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Chukwuemeka Fred Agbata Jnr. (CFA)

The lack of key infrastructure is hurting our economy in so many ways. What would the economy have been like if most of the hardware products used in the country were either manufactured or assembled here?

I have often times reflected on what the Nigerian computer hardware market currently looks like. My conviction is that this segment of the ecosystem still has a lot of potential yet to be tapped.

“The computer hardware market in Nigeria is full of potential,” is a phrase we hear all the time without taking any step to tap the potential. What could be responsible for this?

On the last count, only about seven Original Equipment Manufacturers in Nigeria meet up to 20 per cent of local demand for computer hardware. Now, the question is, what is the overall demand for computer hardware and why is it that only about 20 per cent of the demands are met?

This situation, at some point, prompted the Director General of National Information Technology Development Agency, Dr. Ali Ibrahim, to seek for foreign potential investors, assuring them that the agency would not hesitate to facilitate the establishment of World Class Original Design Manufacturing factories in Nigeria, at least to guarantee local assembling of hardware devices.

Many of the OEM’s that sell their products locally are often asked the question as to whether their company have any plans of setting up a manufacturing plant here in Nigeria.

Of course, they always tell us yes, but ironically, we are yet to see the likes of Samsung, HP or, even, smartphone makers, like Tecno or Infinix, set up manufacturing plants here in Nigeria.

I am not disputing the inherent challenges that exist in the Nigeria manufacturing space but if the likes of Innoson Motors could have a set up that seems to be working, some computer hardware manufacturers, who see Nigeria as one of their big markets, especially, on the African continent, could do the same.

As a palliative, I think the government can give such companies some incentives to encourage them to make this happen.

Setting up their manufacturing or in the first instance, assembly plants here in Nigeria, will also reduce the unemployment statistics in the country as these plants will need skilled labour to function properly. This is aside the technology transfer that will naturally take place.

One of the challenges envisaged here is consumer education. This is an issue for the OEMs because there are some computer products that exist in the market today which many Nigerians have not seen or heard of.

It will only take an extra effort to sensitise and market their products to Nigerians. Some people still have not realised why they need to own a PC and bridging that knowledge gap is pertinent to expanding the market. About two years ago, PC penetration in the Nigerian market was still at about 11 per cent and this needs to be improved upon.

The Managing Director for HP Incorporated in Nigeria, Ifeyinwa Afe, puts this in perspective when she said, “Education is a very key area for us and other OEMs to key into and drive the adoption of PC in the country.”

Expanding the computer hardware market will also not be possible, if Research and Development is side-lined because it provides a proper direction for the OEMs on the type of products that potential customers would love to purchase.

Sometimes, some manufacturers are too reluctant to invest in R&D because it is usually capital intensive. It is, however, a significant investment in the long run because manufacturers would be solving the real problem of consumers which will attract more patronage in sales.

This is not a guesswork business. There has to be some level of research, to break even in the market.

Furthermore, R&D helps manufacturers to understand that consumers are looking for high quality products and good repair plans. These two aspects (high quality products and good repair plans) also play significant roles in expanding the hardware segment.

Nigeria has many computer hardware distributors but it is not enough to have distributors all over the country. What are the qualities of the products that they market? What happens if these hardware products need to be repaired?  These are all fundamental questions that require answers.

Of course, computer hardware breakdown and getting them fixed should not be a problem if there are functioning and well equipped service centres all over the regions in the country.

The repair segment of the computer hardware market could even metamorphose into an industry of its own, considering the fact that it is still to be explored. Yes, we might have some engineers fixing computers at the Computer Village in Ikeja but their business model over the years has not guaranteed the required level of trust.

Interestingly, I attended the official inauguration of a new experience centre by Large Michaels Limited aimed at taking on this challenge. The CEO of the company, Michael Ezeamama, said, “What we have here as an experience centre is different from the usual laptop or PC box pushing centre. We want you to come in and experience any hardware device you want to buy and we have trained engineers that will fix your hardware quickly should it breakdown at any point.”

This is a welcome development but we need to ensure that more of these experience shops should also be located in other cities and this is something the management of the company has promised.

On the other hand, Dayo Adetiloye, Business Development Strategist, puts this in perspective, thus: “No single computer repair company can account for more than five per cent of the total revenue generated in the industry. This is the reason why smaller computer repair businesses account for a large percentage of the players in the computer repair service industry.”

My hope is that more Nigerians will get involved in the hardware ecosystem not just from the distribution point of view alone but also with regards to repairs, assembling and hopefully, manufacturing.

Nigerians must be bold and proud to support such daring pioneers and not expect them to churn out products like the giant OEMs from the very first batch.

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