Last Month’s IT Supply Chain Developments and Their Impact on Buying Decisions

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

Over the years, my columns for Spend Matters have always touched on the peaks and troughs of the euro. Specifically, the impact that currency variations have for procurement professionals attempting to identify trends, stay one step ahead of the game and, ultimately, navigate best price.

February saw the euro lose ground against both the pound and the dollar – and with Article 50 now looking close to being triggered, buying teams must remain vigilant when it comes to:

Exchange Rate

The euro got off to a strong start in February but finished the month down against the pound. Rising from 0.8553 to 0.8634 by February 4, it soon fell, eventually hitting 0.8479 by February 14. From there, it rose to 0.8551 by February 19 before bottoming out at 0.8445 three days later. From there, the euro recovered slightly to finish the month at 0.8522.

The euro didn’t fare much better against the US dollar. It fell gradually from 1.0781 on February 1 to 1.0532 by February 22. A slight recovery saw it end the month at 1.0594.

Despite falling against both markets, media outlets suggest it’s been a positive time for the Eurozone. The Financial Times said that the economy has now seen 14 consecutive quarters of growth, with unemployment figures appearing to stay low. The Nation and CNBC claimed that job creation was at its best in over nine years.

Phones and Tablets

According to Gartner, the last quarter of 2016 saw global smartphone shipments rise 7% YoY to 432m units. Apple and Samsung have continued to grapple for the top smartphone vendor spot but it was Apple who came out top in Q4, overtaking Samsung by 0.1% with 77.04m units and 17.9% market share.

To celebrate ten years of the iPhone, Apple announced it will produce three new models in 2017. According to TrendForce, the three models are a 4.7” LCD with 2GB memory and a 5.5” LCD with 3GB memory, both with up to 256GB storage. The third – Apple’s major draw card – will be a 5.8” AMOLED display with 3GB memory, 64/256GB storage, 3D sensing (with facial recognition and AR features) and a redesign featuring no home button.

Q4 was a woeful time for tablet shipments with hybrid and detachables experiencing their first holiday season decline. According to IDC, global shipments reached 52.9m units for the quarter, down 20.1% YoY, while annual shipments of 174.8m units were down 15.6% YoY.

Traditional PCs

HP announced a second consecutive quarter of growth for PC sales this month up 4% YoY to $12.7b. According to Fortune, the rise has been driven by higher-priced gaming buyers and an increased demand for detachables. Fast forward to now however and HP is expecting a larger than normal dip in sales for the next quarter.

According to IDC, shipments of personal computing devices (laptops, notebooks, desktops, workstations) and tablets combined, will fall at a 0.8% CAGR over the coming years from 435m units in 2016 to 418.2m units by 2021.

Premium Ultramobiles/Wearables

Lastly, IDC’s report predicted strong growth for detachable tablets. They enjoyed 21.4m shipments in 2016, representing 4.0% of the market. In 2021, that number is expected to rise to 56.1m units, representing 13.4% of the market. That’s a 21.2% CAGR compared to the personal computing device market’s overall 0.8% decrease.

 

Stat of the month: The largest amount of new products coming on the market occurred between February 3-6, with 32,097 products being launched in a single day.

 

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