IT Supply Chain Developments and Their Impact on Buying Decisions

Ian Nethercott, MCIPS, Supply Chain Director at IT digital marketplace Probrand,  continues his monthly roundup of the latest movements in the IT market.

The autumnal months are now upon us and, while Brexit discussions rage on, the next political milestone will be Phillip Hammond’s Budget – the final announcement before we officially leave the EU.

Political events may seem peripheral to IT category buyers but can have a huge impact on areas like currency fluctuations, which in turn then influence end cost. In September, PoundSterlingLive reported that the euro weakened following the Italian budget and we may well see the same happen in the UK, depending on what is announced at the end of October.

This is just one example of how macroeconomic factors can impact what we all recognise as a hugely volatile IT supply chain. To help navigate this complex landscape, here are some of the latest developments and major movements that are impacting key IT product categories.

Exchange Rate

In September, the euro started strong against the GBP, rising from 0.8949 on the first of the month to 0.9005 on the 3rd and up to 0.9012 on the 4th. From there, it fell hard, first to 0.8937 on September 8th and 0.8873 by the 20th. A jump to 0.8978 two days later was quickly dashed, as it ended the month down at 0.8900.

Against the US dollar, the euro underwent a rollercoaster of ups and downs. It started the month at 1.1599, before falling to 1.1552 on September 8th and 9th. It underwent a sharp rise to 1.1669 on September 15th followed by a quick drop and another jump to a high of 1.1763 on September 21st. It then held steady for a few days before dropping hard to 1.1602 at the month’s end.

There were several possible catalysts which triggered these currency fluctuations. Eurostat said that inflation rose 0.1% to 2.1% in September while CBS found that consumer prices in the eurozone rose 1.9% YoY.

Premium Ultramobiles & Wearables

In September, ABIResearch predicted that smartwatches will out-ship activity trackers by 2020, with smartwatch shipments set to rise from 40m in 2018 to 108m by 2023, while activity trackers will grow from 52m to 67m over the same period.

Wearable tech has become increasingly popular in recent years for business users who are looking for a compact but powerful device when they’re out on the road. It’s no surprise then that IDC has forecast that global wearable shipments will reach 122.6m units in 2018, up 6.2% YoY. Despite being the first time that wearable shipments dropped below 10% YoY growth, IDC expects more on the way, with total wearable shipments to reach 190.4m by 2022. Smart earwear and smart clothing are forecast to enjoy the biggest growth.

Processors, MEMs, Semiconductors

The Semiconductors Organisation said that global sales grew 14.9% YoY to $40.16bn in August, with China leading the YoY growth at 27.3% ahead of the Americas (15%), Europe (9.5%), Japan (8.4%) and Asia Pacific (4.7%). On the month, all regions were up minus Japan (0.1%) and Europe (-1.4%).

Memory

According to TrendForce, PC DRAM contract prices will drop 2% QoQ in Q4 on the back of Intel CPU shortages for notebooks. Looking ahead, Q3 PC DRAM prices are expected to be up around 2% on Q2. Meanwhile, the overall DRAM market is expected to drop 5% QoQ in Q4.

Monthly statistics

Last month saw a particularly large volume of new products coming onto the market with 40,473 products launched on a single day on September 10th. This compares to a high of 3,702 new products launched on a single day in August.

The highest number of price increases happened during the middle of September, with 42,280 price hikes occurring across a variety of product categories. This is almost double those from the previous month, with a monthly high of 26,266 price hikes on August 9th.

Of course, whenever there are highs, there are also lows. Price decreases in September also jumped around, hitting a high of 39,898 on September 11th.

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.