April 24 (SeeNews) - Demand for personal computers (PCs) in Bulgaria is expected to slowly recover after a sharp decline in 2016 but is unlikely to reach the pre-crisis levels over the next three years, Neli Vacheva, country manager at market intelligence company IDC, said.
"Due to overstock issues and waning consumer confidence, the PC market collapsed by 19.0% in 2016 to mark the worst year since the start of the crisis," Vacheva told SeeNews in a recent interview following the IDC IOT Forum 2017 in Sofia.
"Apart from the traditional distraction of smartphones and tablets, PC users were spending on refurbished or renovated PCs at very low prices. Many business clients opted for second hand computers as well."
Political tensions in Bulgaria throughout the year were another major inhibitor, she added.
In November, Bulgaria's minority coalition government led by centre-right GERB party stepped down after the party's candidate in the presidential elections, Tsetska Tsacheva, lost to Rumen Radev, a candidate backed by opposition Socialists. A caretaker government, led by former parliament speaker Ognyan Gerdjikov, took office on January 27. Two months later, early parliamentary elections were held which GERB won but fell short of absolute majority. A new government is expected to be formed in early May.
Falling prices and promotion campaigns in retail were the main drivers of consumer PC spending in 2016, Vacheva pointed out. Demand for tablets and ultraslims grew in line with expectations, but from a relatively low base. On the other hand, sales of traditional notebooks recorded the worst decline in years.
Commercial demand was stable in 2016 and is expected to remain a driving force in the current year, Vacheva said.
SLOW ADOPTION OF SUPPORTIVE REGULATION HINDERS IOT MARKET
The penetration of Internet of Things (IoT) - the internetworking of hardware, smart devices and other items embedded with electronics allowing them to collect and exchange data - is relatively low in Bulgaria compared to the U.S. and Western Europe, but is close to the average in Central and Eastern Europe (CEE), Vacheva said.
A recent IDC report has shown that IoT revenues in CEE will post a compound annual growth rate of 21.5% over the 2016‒2020 period, reaching $24 billion (22.4 billion euro) in 2020. Spending on IoT in the region reached $11 billion in 2016, according to IDC estimates.
In Bulgaria's public sector, however, non-guaranteed sustainability of projects, complaints filed in public procurement tenders, and slow introduction of regulations aimed at making technical systems more effective hamper the penetration of IoT technologies.
"The regulations have a very strong impact on the IoT market and that is an important area to focus on," Vacheva stressed, citing as an example the delayed liberalisation of Bulgaria's energy market which has impeded investments in smart metering in the country for years.
The policies in the insurance sector do not foster the introduction of advanced insurance models, either, she added. However, the eCall initiative will raise investments in the respective equipment in 2017 and 2018 for all cars that are not manufactured with built-in devices.
The eCall regulation, adopted by the European Parliament in 2015, requires all new cars in the European Union to be equipped as of April 2018 with a device that will automatically dial Europe's single emergency number 112 in the event of a serious road accident, and wirelessly send airbag deployment and impact sensor information, as well as GPS coordinates to local emergency agencies. In December 2015 Slovenia became the first EU country to enable the adoption of eCall calls around the entire country for vehicles equipped with this system.
In the business area, most of the investments in Bulgaria are in security systems such as video surveillance, motion detectors, and remote asset monitoring and control and people tracking. The bulk of funding goes into optimisation of some processes and cost reduction.
However, very few Bulgarian companies have put IoT in the centre of their business development strategy, Vacheva commented.
As some positive examples of local businesses adopting IoT technologies, she pointed to telecommunications services provider Allterco [BUL:A4L] and Checkpoint Cardio - a company which has developed medical devices and software for remote monitoring of patients with cardio problems, which provides 24/7 monitoring in several countries.
Earlier this month, Allterco said its wholly-owned subsidiary, Allterco Robotics, has sold over 15,000 IoT devices in the first three months of 2017, several times more than in the same period last year, and aims to sell over 100,000 units by the end of the year, double the 2016 figure.
The company's children watch MyKi is one of the best selling smart devices in Bulgaria and Croatia, and its pet tracking device MyKi Pet has been certified for sale on the US market. Sales were expected to begin in mid-April.
Allterco operates on eight markets. In Southeastern Europe, the Sofia-based company has offices in Romania, Serbia and Macedonia.