IT Supply Chain Developments and Their Impact on Buying Decisions

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

 

March was another mixed month for the IT channel. Smartphone shipments were down, and PC shipments and memory prices continued to dive but enterprise storage values and panels started to look up. As they say, you win some, you lose some.

Navigating these ups and downs and understanding what’s influencing key IT product categories is crucial to keeping pace with what can only be described as a very complex landscape. And with question marks over Brexit still very pertinent, IT buyers are facing an even rockier road.

Exchange Rate

The euro started the month at 0.8589 against the GBP and held steady until March 7 where it dipped to 0.8576. It then rose and fell again, jumping to 0.8626 by March 10 before falling to a low of 0.8514 by March 17. A sharp recovery to 0.8664 on March 21 was quickly dashed, however. The euro dropped back to 0.8549 on March 23-24 before jumping, and then dropping to 0.8527 on March 27. It then recovered again to end the month at 0.8602.

Against the USD, the euro started at 1.1370 and fell hard, dropping to a monthly low of 1.1217 before steadily rising to a high of 1.1392 by March 21. The euro then dived again, falling all the way down to end the month at 1.1225.

Rumours that the economy is sliding towards another recession were rife again in March – and it wasn’t difficult to see why. Question marks hanging over Brexit have had an obvious impact, with CNBC saying that the eurozone economy was at its worst since October.

Phones and Tablets

IDC forecast that global smartphone shipments are set to decline YoY for a third consecutive year, down 0.8% YoY for 2019 to 1.39bn units. Looking ahead, smartphone shipments are suggested to grow 1.7% YoY to 1.54bn units by 2023, while 5G phones will reach 26% market share, up 23.9% YoY.

According to IDC, Samsung maintained its hold on the EMEA region with Q4 smartphone shipments reaching 27.7m units, down -3.8% YoY but accounting for 28% of the market. Huawei in second enjoyed a 73.7% YoY growth to 20.9m units and 21.2% of the market, while Apple in third dropped 14.8% to 16.4m units and 16.6% of the market, Transsion posted +31.5% YoY to 8.2m units and 8.3% of the market, while Xiaomi in fifth registered +70.5% YoY to 4.2m units and 4.3% of the market.

In other news, 2022 is set to be the year when foldable smartphone demand takes shape, with market share set to grow 0.1% in 2019 to 1% in 2021 and 3.4% by 2022. This comes on the back of more panel providers and continued technology advancements.

In tablet news, IDC said detachables will reach 22.1m units in 2019 and grow to 26.5m by 2023. Meanwhile, slate tablets will drop from 114.7m units to 95.6m units over the same time period, resulting in an overall 2.8% decline in tablet shipments from 136.8m units in 2019 to 122.1m by 2023.

Traditional PCs

IDC’s report also said that global PC device shipments – including desktops, notebooks and tablets – will fall 3.3% YoY in 2019 to 391.1m units and continue to drop at 1.2% to 372.6m units shipped by 2023. Combined desktop and notebook shipments will reach 254.4m units in 2019 and fall at a CAGR of -0.4% YoY to 250.5m units by 2023. Notebooks alone will enjoy a 0.7% growth over that time.

Displays

Global TV panel shipments grew 2.9% YoY in 2018 to 221m units, on the back of TV upgrade sales for the World Football Cup according to IHS – a prime example of how seemingly peripheral events can have a knock-on effect for IT buying.

The report also noted over 75% of all shipments in Q4 were smart TVs, and in Western Europe 63% of all shipments were UHD, the highest share of any region.

In other news, global PC monitor shipments fell 2.1% YoY in Q4 to 31.4m units. Looking ahead, IDC said annual monitor shipments are expected to fall 2.7% YoY to 118m units for 2019 and further to 114m units for 2020. By vendor, Dell beat HP and Lenovo to top Q4 shipments while, by technology, curved monitors enjoyed 15.4% QoQ growth in Q4 and 27.1%.

Monthly statistics

March was a bumper month for new products coming onto the market with 2,922 launched on March 18 compared to a high of just 190 on February 18.

When it came to price increases, there were three distinct price hikes occurring across a variety of product categories – 36,767 on March 4, 32,835 on March 11 and 35,407 on March 22. At the opposite end of the scale, price decreases in March hit a high of 2,795 on March 28 which was significantly lower than the high of 46,543 in February.

For more information about the context of these movements, please see this video:

 

Disclaimer: the opinions expressed are those of the author and not necessarily those of Spend Matters.

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