IT Supply Chain Developments and Their Impact on Buying Decisions

Al Nagar 1Al Nagar, Head of Benchmarking, KnowledgeBus, Mercato Solutions, continues his series of advisory pieces sharing recent movements and impactors within key IT product categories, to keep you abreast of the latest developments and help support purchasing decisions.

 

 

August into early September has been a busy month for impactors hitting the global IT supply and manufacture of IT, including displays and consumer notebooks in particular. Gartner also warned CIOs in the Eurozone, and further afield, they would need to account for a 20% increase in dollar product pricing. Meanwhile, currency devaluation in Europe and Japan have affected global semiconductor sales, which had been buoyant for the previous few quarters.

The second quarter as a whole has seen IT purchasing lose momentum across a range of categories. Although the wearables market grew substantially, interest in printers and tablets were both down. Even smartphones – a typically thriving sector – appears to have been harder to shift, with sales slackening in recent months.

Exchange Rate

Experiencing a poor performance for much of 2015, August was the month which finally saw the euro pick up, enjoying a relatively buoyant month against the pound. Starting the month at 0.7032 it dropped to 0.6980 just a week later before picking up to 0.7131 on August 14. From there, it had a slight wobble before reaching a monthly high of 0.7330 on August 27. It finished the month at a respectable 0.7262.

Recent months have seen the euro endure a similar pattern of peaks and troughs against the dollar, and August was no different. The euro started the month against the dollar at 1.0974 before dropping to its monthly low on August 6. From there it enjoyed a steady climb to 1.1514 on August 26 before dipping to 1.1181 on August 31.

The cause of the Euro’s rise lay half a world away with concerns over the Chinese market sending stocks plummeting, causing a ripple effect around the globe. Investors have shied away from emerging markets, seeking safe harbour in the Eurozone as analysts also voiced concerns about the US’s ability to raise investment rates. Failure to do so could see the euro continue to rise, affecting exports from Germany as a result. On the other hand, this could help to correct some of the currency devaluation that has impeded the sale of IT equipment in the region.

Phones and Tablets

Tablet shipments dropped by 4.4% in Western Europe during Q2, according to IDC. This may be due to slowing sales growth of smartphones across the board, including emerging markets that were previously driving growth. A decline in Chinese sales can be largely attributed to market saturation. Gartner has said that global Q2 2015 shipments grew at their slowest rate since 2013, totalling 330m units. This may sound dismal, but still represents a healthy 13.5% growth rate year on year.

Traditional PCs

The launch of Windows 10 did little to stabilise PC sales which continued to plummet in August. Intel seems hopeful that its latest Core offering will give the PC market a much needed boost, although IDC doesn’t see a return to growth until 2017. The analyst predicted that the PC market will fall a total of 8.7% by year’s end, resulting in five consecutive years of decline. Currency devaluation came into play once more, slashing sales. Meanwhile, IDC revealed that desktop PC sales will represent 31.1% of PC market share in 2015.

Printers

According to IDC, worldwide printer shipments dropped nearly 6% in Q2 to 24.1m compared to the previous year. Shipment values also dipped during this period, dropping by 3.4% to $13.2bn. The decline was slightly less in Western Europe, where shipments fell 2.6% YoY to 4.79m units.

Brighter spots included business inkjets, which increased 16.3% year on year. Despite the fact that standalone laser shipments dipped 5.5%, they showed a strong revenue bump, helping to grow Western European printer revenues by 6.6% in the second quarter. Context research said that the global personal 3D printer market also performed well in Q2, although the industrial segment stalled. Personal 3D printer shipments increased an impressive 25% year on year in Q2, despite the market slowing down overall. The second quarter of 2015 marked the first ever sequential decline in unit shipments in this category, the firm said.

If trends continue, desktop 3D printers will see a unit growth rate of over 50% year on year for 2015, while the industrial segment may only see single-digit growth rates. North America remains the strongest region for this category, although European distribution deals could stoke the market too.

 

Discuss this:

Your email address will not be published. Required fields are marked *