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.

Brexit continues to be a political hot potato and things certainly heated up in November, with Teresa May finally unveiling her draft plan for Brexit. The link between Brexit and how much you pay for IT may seem a bit far removed, but this is a prime example of how a geopolitical event can impact areas like currency fluctuations and trickle down to influence end-user costs.

We may not be able to predict the outcome of Brexit but understanding how these impactors affect the IT supply chain means purchasing teams can spot patterns and make better decisions about the smartest time to buy. Crucially, it means you can spot when margins are unnecessarily inflated – and question why – versus identifying whether a socio-economic issue may have had a knock-on effect.

To help navigate this complex landscape, here are some of the latest developments and major movements that are influencing key IT product categories.

Exchange Rate

After sitting at 0.8887 until October 3, the euro fell against the British pound, first to 0.8778 by October 6 and 0.8737 by October 10. A small rise to 0.8808 on October 15 was followed by a quick dip before a series of strong increases, eventually reaching 0.8907 by October 30 before ending the month at 0.8891.

Against the US dollar, the euro started at 1.1590, fell to 1.1479 by October 9, rose to 1.1575 by October 12. This was followed by a small drop to 1.1580 by October 16. The euro then fell hard, hitting 1.1479 on October 19, 1.1377 by October 26 and ending the month down at 1.1331.

According to the New York Times, the eurozone’s economic growth fell to its slowest in four years in Q3, up just 0.2% on the quarter. Meanwhile, the Washington Post reported that consumer prices in October rose at their fastest since December 2012, with inflation rising from 2.1% in September to 2.2%.

Phones and Tablets

Xiaomi reached its goal of 100m shipments in October, an impressive two months ahead of schedule. Boasting 43% YoY growth, the South China Morning Post added that Xiaomi is now the fourth-largest global smartphone vendor. Meanwhile Huawei reached 100m shipments in July and is on track to record 200m shipments by the end of the year.

In other news, OnePlus is working on becoming the first to launch 5G smartphones in Europe, with 2019 set for the launch date.

Meanwhile, IDC said that global smartphones reached 355.2m shipments in Q3, down 6% YoY. By vendor, Samsung led the market with 72.2m units shipped and 20.3% of the market, despite dropping 13.4% YoY. Huawei (+32.9% to 52m and 14.6%), Apple (+0.5% to 46.9m and 13.2%), Xiaomi (+21.2% to 34.3m and 9.7%) and OPPO (-2.1% 29.9m and 8.4%) rounded out the top five.

In tablet news, the global market fell 8.6% YoY in Q3 to 36.4m units, according to IDC. Apple led the market with 9.7m units and 26.6% of the market, down 6.1%. Samsung, Amazon, Huawei and Lenovo made up the top five.

Traditional PCs

IDC reported that global personal computing shipments for Q3 fell 0.9% YoY to 67.38m units. By vendor, Lenovo led the market with 5.8% YoY growth to 16.15m units and 24% market share. HP followed with just +0.3% YoY growth to 15.35m units and 22.8% market share, followed by Dell, Acer and Apple completing the top five.

Gartner on the other hand said Q3 global PC shipments grew 0.1% YoY to 67.2m units, with Lenovo, HP, Dell, Apple and ACER holding the top five vendor spots.

Storage

Western Digital announced a 15Tb hard drive unit aimed at enterprise customers. Seagate vowed to release 100Tb storage products by 2025, using heat assisted magnetic recording (HAMR) technology.

Monthly statistics

Last month saw a relatively modest number of new products coming onto the market with 3,183 products launched between October 19 – 21. This compares to a high of 40,473 new products launched on a single day in September.

The highest number of price increases happened on October 22, with 46,640 price hikes occurring across a variety of product categories. This follows a pattern, with a monthly high of 42,280 occurring in September.

Similarly, price decreases in October hit a high of 28,976 on October 22, compared to a high of 39,898 on September 11.

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