IT Market Information for July from Al Nagar of KnowledgeBus

Al Nagar, Head of Benchmarking, KnowledgeBus, continues his advisory series, sharing recent movements and impactors within key IT product categories, to help support purchasing decisions and keep you abreast of latest developments.

There were negative or flat sales across several categories in the IT market in July, including PC shipments which fell nearly 10% during the second quarter of 2014 according to Gartner. This had a knock-on effect for related categories including hard drives, display panels and memory, where shipment figures were lower.

July also saw Microsoft’s highly anticipated Windows 10 launch. While it may not have an immediate impact on the business market, it could certainly encourage some refreshes in the consumer space.

 Exchange Rate

The euro had a turbulent ride against the US dollar in July. It started the month at 1.1181 before falling to 1.0998 on July 8. It then recovered on 13 July to 1.1148, before slipping down to 1.0828 a week later. It enjoyed a small peak after that, but fell again, ending the month at 1.0952 on July 31.

Again, things weren’t much better for the euro against the pound. It started at 0.7109 at the beginning of the month, reaching a monthly high of 0.7198 on July 11, before tumbling to 0.6937 – its monthly low – on July 19. Similarly to the dollar, it recovered slightly, but plummeted again, finishing the month at 0.7018.

The poor performance of the euro was mostly to do with Greece as leaders came together to participate in crisis talks in the hope of reaching an agreement on Greek debt financing.

 Phones and Tablets

Shipments of tablets fell 7% worldwide in Q2 2015 to 44.7 million units, which, according to IDC, represents a 3.9% decrease compared to Q1 this year. IDC described this as a ‘profound shift’ in the vendor landscape, with Apple and Samsung among those to lose out on market share. Between the two companies, market share in Q2 2015 fell by 4.2% compared to the previous year, to 41.5%.

In light of depleting shipments, vendors like LG and Huawei are looking to gain traction by targeting features such as cellular connectivity and larger form factors.

Q2 of 2015 saw Apple maintain its position as market leader, shipping 10.9 million units, while Samsung held the number two position with 7.6 million units.

Smartphone shipments were a lot more positive however. Q2 saw the worldwide smartphone market grow by 11.6% compared to the previous year. IDC claimed that this represented the highest shipment total for a single quarter. This growth can largely be attributed to affordable handsets in emerging markets.

Premium Ultramobiles

The two-in-one hybrid market was reasonably quiet in July, although there was a series of interesting reports in the wearables market. Taiwan’s Advanced Semiconductor Engineering Inc., one of the key suppliers for the Apple Watch, was reported saying that it did not reach breakeven volume (representative of 2 million units per month) in Q2 2015, and that it did not expect to reach that level during Q3.

Piper Jaffray analyst Gene Munster also lowered his estimate for Apple Watch sales from 3 million in Q2 to 2.5 million. Apple came back to say that the watch has sold better than its own forecast, although the fact that it hasn’t yet released any numbers suggests that the Apple Watch is more of a consumer gimmick than a must-have for the enterprise market.

Storage

Lastly, EMC stated emerging storage products – which includes flash-based and software-defined storage – were the healthiest markets in the category during Q2, growing by an astonishing 49%. The market for external storage is expected to expand at a compound annual growth rate of 2-3% through 2018, while flash storage will grow at a CAGR in the “high teens”.

Stat of the month: July 17 saw the most product launches in a single day at 1174.

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