Brazilian PC manufacturers lose market share

In the last decade, many Brazilian consumers have entered the world of computing with PCs from companies such as Syntax, Intelbras Amazon and PC. Driven by tax incentives of the law, of 2005, these and other local manufacturers have a significant presence in retail stores across the country.
But finding equipment from many national brands has become an impossible task. With the growth of the market and investments of foreign competitors such as Hewlett-Packard (HP), Dell, Lenovo, Asus and Samsung, several Brazilian manufacturers closed doors or changed. As a result, the participation of national companies had a dramatic reduction in the market.
Of the 10 largest PC vendors in Brazil in 2010, six were Brazilian manufacturers, according to research firm IDC. At the end of last year, only three national names participated in this list: Positivo Informática, CCE and Itautec. Considering all the Brazilian companies that operate in the market, the group membership is still relevant: represents 54% of the total sales, in number of units. In 2010, however, this participation was 64%. That is, in two years, there was a decrease of 10 percentage points.
The distribution also is uneven. There is no official number of how many domestic manufacturers operating in the PC market, but the scenery is made up of many small companies, which account for very thin slices of cake, except for consolidated brands, such as positive. In the case of multinationals, the composition is different-there are few companies with great firepower, enabling each of them to occupy a larger space.
It is expected that participation by domestic manufacturers is even smaller. On Wednesday, Itautec, which last year was the 7th largest seller of PCs in Brazil, has announced that it will close its operations in the coming months. This fact, together with the incorporation of CCE by Chinese Lenovo-a deal announced in September 2012, and completed in January of this year-leaves in list of largest sellers just positive, that is the industry leader, with 13%.
Brands like Microboard, Qbex, SpaceBR, among others, remain in the list of equipment available in retail, but the majority of these companies was limited to certain regions of the country, with little space in major retailers, says Bruno Freitas, an analyst at IDC.
The main difficulty for Brazilian manufacturers is the tick, which has become a condition to be successful. "This has become a volume business, with increasingly tight margins. Only takes advantage who can manufacture in large quantities, "said Henri Penchas, Chief Executive of Itautec, in an interview to the value, in explaining the decision to leave the area of PCs. According to Penchas, even with the tax incentives granted by the Government, it is difficult to compete with international manufacturers.
Who has the scale, get better conditions when negotiating with suppliers of components, which allows you to sell the products at lower prices and get the best margins. With generally fatter that Brazilian companies, international companies also manage to better protect from currency fluctuations, another critical point, since the inputs are quoted in dollars.
"Life has not been easy over the past two years and will not be in the next two," said Camilo Stefanelli, commercial Director of Brazilian Megaware. Executive assessment, the Brazil and the emerging countries will still serve as thrusters for the PC market, attracting more investments of global companies. "To compete, we need to be more agile and launch products that meet the specific needs of Brazilians, something that large cannot do because they are attached to global settings of their products," he said.
In the evaluation of IDC, the specialization in specific segments is an alternative to Brazilian manufacturers. That is, for example, the path followed by Accept, from São Paulo.
Over the past two years, the company left the markets of notebooks and desktop computers, or desktops. Since last year, went on to strengthen the operations of machines with small towers, more suitable for offices ("smart clients"), with greater processing power ("workstations") and equipment that store and make the business data processing, or servers. "We do not want to act in areas of much volume, which are the ones that have problems," said Silvio Ferraz de Campos, commercial Director of Accept.
Diversify the product offering has been another alternative. In Positivo Informática, mobiles and tablets were added to the portfolio in the last two years. "We are not another computer company. We are a manufacturer of devices ", said the Chief Executive of the company, Helium Rotenberg, last week, during a teleconference with analysts on the company's results in the first quarter. The strategy has been praised by analysts and investors, because it reduces the dependence on PCs.
The competition, regardless of the size and origin of manufacturers, tends to intensify. According to IDC, sales of PCs fell back 2% in 2012, to 15.5 million units. For this year, the expected drop is even sharper-7%. Until 2017, it is estimated that the average annual growth of less than 1%. With consumers more skittish, companies will have to be even more aggressive to win it.