INTC -- Sunday April 8 9:12 AM ET
Intel(INTC.O) Sees Big Potential in Emerging Markets
By Esmat Salaheddin
Cairo (Reuters) - U.S. computer chip maker Intel (NasdaqNM:INTC - news) is looking to emerging markets to boost its business and is keen on expansion in the Middle East despite regional political turmoil, a company official said.
Intel Regional Sales Manager Nadim Garoudi told Reuters in an interview that despite a global economic slowdown, business in the Middle East was booming thanks to solid oil prices and widespread demand.
He said that despite a deadlock in Middle East peace efforts, a Palestinian uprising against Israeli occupation and an Israeli blockade of Palestinian areas, Intel's turnover in the Middle East doubled in 2000 compared to 1999, Garoudi said.
Intel does not publish regional results.
``The plan for this year may not (be to) double (turnover), but definitely something very close,'' he said at the weekend on the sidelines of the Cairo Gitex 2001 information technology trade fair.
``Despite the political crisis, business is still booming, partly because of higher oil prices, which means higher revenue for oil exporting countries,'' he said.
Garoudi said many governments in the region -- like Egypt, Saudi Arabia, the UAE and even Jordan -- were focusing on e-business concepts in many sectors.
``There is a conscious effort by leaders in the Middle East to invest a lot in IT (information technology),'' he said.
``Egypt and other emerging markets, like eastern Europe, the Middle East and Africa...are growing very, very fast (for Intel), much faster than the traditional mature markets like the United States and western Europe,'' Garoudi added.
Potential For Expansion
The rate of growth in personal computer sales in emerging markets ranged between 22 and 24 percent in 2000 compared to a projected average of 13 percent in developed countries this year, he said, adding Intel expected the emerging market level to be maintained for several years.
Saturation levels were also much lower in the developing world. In Middle East homes, for example, the PC penetration rate stood at about 15 percent of households against 50 percent in western Europe and 70 percent in the United States, he said.
Garoudi, who is responsible for sales in the Middle East, eastern Europe and Africa, said these regions still offered potential for expanding business.
``It's very important to us, strategically, to focus on emerging markets,'' he said.
Garoudi said Intel had this month opened an office in Cairo as part of a policy of regional expansion.
Intel opened an office in Dubai, the United Arab Emirates, in 1996 and opened a chip manufacturing plant in Israel about 25 years ago.
Intel is the world's largest chip maker and its processors run about 80 percent of all personal computers in the world.
In October, Intel won government approval for a $500 million project to build a microchip plant in Egypt. Garoudi said the plan was on ice due to the global economic downturn.
``These plans right now, not just for Egypt but overall, are not (being executed) in the immediate future due to the world economic slowdown,'' Garoudi said, adding that Egypt was still a top candidate for such a plant when conditions improved. |
