IT Supply Chain Developments and Their Impact on Buying Decisions

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

Walk into any high street store during the summer months and you’ll probably find a selection of autumn wear already in stock. This is because retailers always work one season in advance, anticipating trends and reacting to seasonal change to remain relevant in a constantly changing market. Fashion buyers, therefore, have to be aware of these patterns in order to make informed purchasing decisions that also secure the best deal.

In the same way, IT buyers must always stay one step ahead, with new technologies, fluctuating exchange rates and overseas delivery costs, all areas to consider when navigating best price.

March saw GfK release its IT B2B Market Update: Year to Date 2015. The GfK B2B tracked IT market saw an increase of 7% in sales value comparing January – February 2014 against the same period in 2015. This was positive news indeed, with sales growth across software and storage big contributors to this growth.

Exchange rates

A testing time amidst exchange rate volatility is predicted. Since late 2014 the dollar is up 15% against GBP and multiple vendors are warning of further UK IT price rises this year as a result.

March saw the euro rise against the UK pound, although it underwent a series of ups and down to get there. Starting at 0.7249 at the beginning of the month, the European currency rose slightly before dipping to a monthly low of 0.7073 during the middle of the month. From there, it began a steady climb, peaking at 0.7363 on March 27, before finishing at 0.7313 on the 31st.

The curve was similar against the US dollar, starting the month at 1.1191 where it cruised until March 4. Following this, it began a decline only briefly between March 8-10. After flattening out at 1.0493 on March 15 it began a steady recovery, but didn’t get beyond a 1.0961 peak on March 27, finishing the month at 1.0850.

Phones and Tablets

Samsung dominated headlines in March with the launch of its Galaxy S6 and S6 Edge. Analyst firm TrendForce predicted that the devices will ship 5 million units more than expected during their first quarter, bringing the total quarterly shipments to 22.2 million, with a 20% increase in sales for the year.

It’s important that organisations look at how new technologies align with the business objectives. While the Galaxy S6 and S6 Edge have already received rave reviews, they may not necessarily be the right fit for every organisation. It’s key that companies don’t automatically reach for the shiniest new technologies, but instead look to the bigger picture in identifying what they are trying to achieve, and how technology can get them there.

Last month also saw Samsung enjoy success in the tablet market, achieving 7% unit growth. This was largely driven by its Galaxy Tab S and Tab 4. Apple on the other hand was less positive, with the iPad falling by 15% in shipments between 2013 and 2014.

Lastly, ABI Research announced that tablets will gain 52% of the mobile computing market by the end of 2015. This may well result in flat growth across notebook PCs, which is largely due to longer replacement cycles and greater competition across the market.

Premium Ultramobiles

March was a hugely positive month for premium ultramobiles, including devices such as Apple’s MacBook Air and Microsoft’s Windows 8 Intel-based products. Worldwide shipments of premium ultra-mobile devices reached 36.7 million units last year, with sales expected to reach 53.4 million units in 2015 according to Gartner.

Wearable technology continues to make some noise with IDC forecasting a stronger global market in 2015. The analyst firm predicted that it would increase 133.4% in unit shipments to 45.7 million units, up from 19.6 million units the previous year. Smart watches are largely accelerating the market, making up over half of all shipments in the coming year.

Storage

In Western Europe, the market for enterprise-class external storage systems was flat during the third quarter of 2014, with a decline in the UK, France, and the Nordics. General political uncertainty may well have contributed to this.

In its IT B2B Market Update: Year to Date 2015, GfK announced that a 43% growth in storage only had a 7% increase in volume comparing 2015 year-to-date with the same period for 2014. The organisation suggested that this may highlight a trend amongst businesses that are now more willing to invest in higher capacity and higher speed. This in turn sees less demand in the USB market which has undergone a 20% decrease in value.

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