Harsh economy: Laptop dealers groan over high cost, low demand

A visibly distraught Cornelious Anyanwu brightened up his face with an expectation of sale when our correspondent sauntered into his shop, but his mood soon changed when he was told the visit was just to make an inquiry about the business.

For him, it had been one of many bad days of no sale and it was almost 5 PM.

“This is not the best of times my brother. Sales have been terrible as costs are rising every day. This is what we have been doing for years, never have we had it this bad.

“I’m not sure I’m going to restock my shop after this because we are just tying money down as people are not coming to buy. A few people that come usually walk away when they realize the prices are far higher than their budget,” he told Nairametrics.

A visit to other laptop dealers at the popular Nigerian tech market, the Lagos Computer Village, would soon reveal that it was a general problem as most of the dealers are having a hard time selling their wares.

This is even as the cost of the devices has gone up by more than amidst the forex scarcity and high inflation in the country.

According to the dealers, while importing the devices had become very difficult with the forex volatility, their customers are also finding it difficult to cope with the rising costs when the laptops are eventually available.

This has led to poor sales as many prospective customers often turn back because of the high price.

Rising costs

Giving details of the new prices of the laptops, Anyanwu disclosed that an HP SPECTRE X360 laptop which had sold for N890,000 three months ago now cost N1,025,000; an HP PAVILLION X360 laptop which had sold for N350,000 now went for N452,000.

According to him, an HP PAVILLION 15-EG2153 laptop which was sold for N480,000 now goes for N587,000. He said the prices are bound to go higher any time based on the forex volatility even as the market become unpredictable.

Switch to used laptops

According to the Chief Executive Officer K-Chronos Global Tech Limited, Mr. Presley Ibadin, the high cost of new laptops has seen many Nigerians shift to used laptops as opposed to buying new ones and dealers are also moving along with the trend by stocking used devices, which are cheaper compare with new ones.

He, however, noted that for the used laptops, the dealers are also having it difficult to sell as most times customers come with budgets lower than the cost.

“If you have not sold in a day and someone comes to you offering a price that is even below your cost price, you have no choice but to just settle for the cost price, if the customer is willing to pay. This is because you have your money tied down in the business and you are also in need of money. It has been tough but we are surviving by the grace of God,” he said.

Mr. Ibaden said they also try to work with his customers’ budgets by looking for other low-budget laptops for them in the market whenever he realized the laptops he had in stock were above their means.

The forex challenge
The Chief Executive Officer of Software Shop Ltd., Mr Austin Agbakor, said the unstable foreign exchange rate is the major cause of the laptop market’s current problem.

According to him, many of the dealers are currently running at losses as a result of the volatility.

“For me, basically, inflation is our major problem and I believe some dealers may run into huge losses and indebtedness due to the unstable exchange rate.
“A dealer takes a product at the rate of N705 per USD and sells at such rate with little interest only to go back and buy the same product at N805 per USD. That is a major loss for the dealers.

‘’This is one of the major factors affecting the cost of laptops,’’ he said.
Agbakor further highlighted the cost of production of the laptops as another factor responsible for the hike in its price.

He said that Nigeria did not produce computer components, rather it imports; so the cost of production and shipping would continue to affect prices.

“No part of a computer board is manufactured in Nigeria and many Original Equipment Manufacturers (OEMs) are only branding and assembling locally and not manufacturing.

“The possibility of laptop prices falling is slim as a result of hi-tech research on laptops and increasing cost of technology,’’ he added.

Also speaking on the situation of things in the device market, the Chief Executive Officer, QKIT Technologies Mr Oluwatosin Osoba, urged the government to urgently do something to encourage local production of laptops and to also ensure a conducive environment for production to thrive.

He noted that with the high cost of living and low earnings, patronage of laptops would continue to be greatly affected unless something was done to remedy the situation.