Still some life left

It expects more good news over the holiday season. “We are bullish about Christmas,” says CEO Dave Miller. “There is still some money in the market.”

Technology forms an important part of modern life, he says. “People can't do without some form of technology and, like it or not, it needs to be replaced and upgraded periodically.”

Nedcor equity analyst Sid Vianello agrees. “They are in the sweet spot. IT, computers and peripheral digital products have experienced growth in this economy.”

Incredible Connection has a 38% share of the SA consumer market for notebooks and personal computers, selling 86000 notebooks and 38000 PCs annually. It holds 32% of the SA printer market and 35% of the software market. It is Vodacom's biggest retailer of 3G data and the biggest retailer of Apple iPods.

Three years ago it ranked only fourth in iPods. “It was a conscious thing,” says Miller. “We increased our range, gave it more space and added more accessories. Each iPod model has over 5000 accessories.”

Vianello isn't convinced Incredible Connection can sustain the 18% annual compound growth it has enjoyed in recent years, but believes there is still momentum in the electronics sector. “There will be growth, as there will be for Game and Makro too. They all do reasonably well.”

On the other hand, he expects fewer Christmas sales of goods like big screen plasma TVs. Disappointing results from sister company HiFi Corporation underlines his point. “Bonuses, share options, stock market options — they have all gone. But people can still buy toys for their children. You buy the affordables.”

Miller says Incredible Connection's hi-tech specialisation will serve it well. “There are huge opportunities in areas such as data and data availability. Eventually data will drive everything in your home, from the Web-enabled microwave to the garage and lighting. We will sell all of those devices.”

Source: Financial Mail

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