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 market for IT category buyers.

It was another negative month for the IT channel in February with the euro falling against both currencies, smartphones posting minimal growth, DRAM revenue falling hard and printer sales in decline.

It may sound all doom and gloom but, by keeping up with the latest developments and major movements that are influencing key IT product categories, buyers can keep pace with what can only be described as a very complex landscape and make better buying decisions more confidently.

Exchange Rate

The euro started at 0.8753 against the GBP, rose to 0.8790 by February 6, dropped to 0.8736 on February 9 and rose to a high of 0.8795 by February 14 before diving hard, hitting a low of 0.8564 on February 27 and ending the month at 0.8565.

It was similar result against the US dollar with the euro starting at 1.1456 and falling to a monthly low of 1.1281 by February 14 before recovering to 1.1345 by February 20 only to drop again, ending the month down at 1.1382.

It wasn’t a great month for the eurozone overall. Reuters said manufacturing is well and truly in reverse, with the PMI hitting a seven-month continuous decline to 49.3, down from 50.5 in January. It’s the first time since 2013 the PMI fell below 50. Reuters’ report also suggested there are rumblings of a potential recession – the ECB are planning to launch cheap bank loans from June and postpone hikes until 2020 to try and counter this.

Phones and Tablets

Global smartphone sales grew just 0.1% YoY in Q4 2018 to 408.4m units. According to Gartner, Samsung led the market with 70.78m units and 17.3% market share, ahead of Apple (64.52m and 15.8%), Huawei (60.40m and 14.8%), OPPO (31.58m and 7.7%) and Xiaomi (27.84m and 6.8%).

Annually, global smartphone sales posted a 1.2% YoY growth to 1.6bn units, with Samsung again leading Apple, Huawei, Xiaomi and OPPO.

IDC forecast a 0.8% YoY decline in 2019 smartphone shipments to 1.39bn units, marking a third consecutive YoY fall. Looking ahead, H2 is expected to enjoy a 2.3% YoY increase, but not enough to drive annual YoY growth. In the long term, the market will grow steadily to 1.54bn units shipped by 2023.

Despite the hype around 5G, IDC’s report notes that 4G will remain the dominant phone network, with 5G gaining just a 0.5% market share in 2019 and 26% saturation by 2023.

Traditional PCs

Strong desktop, notebook, and notebook workstation sales in January contributed to a 5% growth YoY for Western Europe commercial PC sales. Consumer sales were down 5% YoY in January. In the UK, business PC sales grew 11.8%, but consumer sales were down 27.2%.

Premium Ultramobiles & Wearables

According to a report from Context, commercial ultra-thin notebook sales (with a z-height under 18mm) jumped 50% in Western Europe to reach a 22% share of the commercial market. Wearable shipments passed 100m devices in 2018, driving sales to $19bn, up 17% in value, Mediapost reported. Looking ahead, it expects growth in wearables to decline through 2022, where it will reach 145m units shipped and $27bn in retail value.

Monthly statistics

February saw a very low number of new products coming onto the market with 190 products launched on February 18 compared to a high of 210 between January 4-6. There was a high of 7.460 products launched in December 2018.

The highest number of price increases happened on February 19, with 64,716 price hikes occurring across a variety of product categories. At the opposite end of the scale, price decreases in February hit a high of 46,543 on February 27 which was lower than the high of 57,748 in January.

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