ECONOMY

IT market’s retail boost

Based on 2006 results announced by information technology companies, one can make two general observations, the first of which is related to the rise of the retail segment of the market. The dominant forces are now commercial businesses, in particular retail chains, as opposed to software firms and IT service companies which once held the reins of the domestic market in the 90s. A second observation regards the significant growth of certain businesses enjoying an almost monopolistic status in the market. Intralot, for instance, now holds the third highest position in the Greek market, while First Data Hellas (formerly Delta Pliroforiki) has made it into the top 10. Both of these companies face hardly any competition in the market, with their profit margins standing at nearly 30 percent of turnover. A further reversal could also be observed in the IT market in 2006, as for the first time in its history, Plaisio Computers reached the sector’s top position based on turnover. The firm’s strong growth helped its income skyrocket to over 300 million euros. In contrast, Info-Quest was relegated to second place after many years at the top, with its turnover dropping as much as 34 percent, mainly as a result of the sale of its subsidiary Q-Telecom. The rise of retail chains specializing in IT products has expanded across the board. Multimedia and Microland Computers saw their market shares improve in 2006, in spite of lower profitability compared to competitor Plaisio. Media Markt, in its first year of operation in the country, posted income of 31 million euros, reinforcing an already obvious conclusion that major retail chains are on a faster growth trajectory than the market itself, by laying their hands on the shares of smaller IT product chains and single stores. Wholesalers, or IT product distributors, are also showing signs of growth, with certain firms such as Octabit, Enet, Iason and Dionic gaining larger market shares in 2006. Such growth, however, is not so much related to the market’s growth as to the vacuum and opportunities left behind by the collapse of the once mighty firm of Pouliadis. Mixed results were posted by multinational players (excluding First Data Hellas, which in 2006 saw its market share improve), with IBM announcing a drop in both income and profits. Hewlett-Packard Hellas also suffered significant losses, but the firm announced a major growth of activities not reflected in its results. Data on the top 20 firms operating in the sector showed a considerable increase in income of 7 percent, while after-tax profits more than tripled. However, a number of extraordinary developments have clouded the picture somewhat. For instance, Info-Quest’s sale of Q-Telecom has had a severe impact on the firm’s income and profitability. Regarding the sector’s 20 top companies, profits before tax, interest and amortization dropped by 2.5 percent, while it is estimated that the growth rate is less than 5 percent, near the limit of statistical error.