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. Thanks to Al for his informative and very useful posts throughout the year. 

2016 has been one of the most turbulent twelve months ever. From a shock US president to Brexit, there have been few areas unaffected for procurement professionals, including plummeting currencies and inflation. In my monthly columns for Spend Matters, I always stress the importance of monitoring trends to support purchasing decisions and ultimately, achieve best price.

And while no one could have predicted the events of 2016 and the way they occurred, keeping abreast of the latest developments, including the fluctuation of trade costs, means buyers can understand the difference between typical ups and downs versus more abnormal trends. This knowledge stands you in good stead to be tougher on suppliers who may well use issues like Brexit to inflate prices.

2017 will have to see buyers becoming more scrupulous when scrutinising suppliers, forcing them to be more transparent on their pricing.

Exchange Rate

The euro’s movements in November were like finding a lump of coal in your Christmas stocking – bitterly disappointing. Although it must be said it wasn’t a complete surprise. Against the pound, the euro suffered a series of falls in November after an initial rise. Starting the month at 0.8991 it jumped to 0.9029 on November 2 before falling to 0.8893 two days later. It sat there until November 9, falling to 0.8602 by November 14 and bottoming out at 0.8478 on November 24. A slight recovery saw the euro end the month at 0.8516.

Sterling faced a similar fate against the dollar. It started the month at 1.1002, rising to 1.1135 by November 6 and then falling again, eventually reaching 1.0551 by November 23. A slight recovery saw it end the month at 1.0627.

The reason for another turbulent month? An uncertain political situation in the Eurozone has gone against the single currency, and rumblings from the European Central Bank about further quantitative easing have led to a nervous market.

Phones and Tablets

Global smartphone sales grew by 5.4% YoY in Q3 to reach 373m units. According to Gartner, Chinese vendors Huawei, Oppo and BBK were the only companies to increase sales for the quarter, accounting for 21% of all smartphones sales.

Samsung suffered its biggest ever smartphone sales decline during Q3 thanks to its disaster with exploding Galaxy Note 7 devices, dropping 14.2% YoY. Despite this, Samsung still maintained top spot with 71.7m units and 19.2% market share, followed by Apple with 43m units (down from 46m) and 11.5% market share, and the three Chinese vendors.

According to IDC, tablet shipments to the Western Europe market fell 5.7% YoY in Q3 to 8.2m units. Apple and Samsung led the market, despite both posting shipment losses, while Lenovo, Acer and Amazon enjoyed growth in third, fourth and fifth places respectively.

Traditional PCs

TrendForce predicts global notebook shipments will fall 4% YoY in 2016 to 157.9m units and another 4.5% YoY in 2017. This year’s losses are caused by the component market’s rising prices and supply shortages, while 2017’s drop will be due to LCD panel market’s structural supply shortage.

HP will own the top spot in both 2016 and 2017 with 22.2% and 22.6% market share, respectively, while Lenovo will sit in second with 21.5% and 21.2% and Dell in third with 15.1% and 14.6%.

Meanwhile, IDC predicts that 2016 global PC shipments will fall 6.4% YoY to 258.2m units, and are set to fall another 2.1% YoY in 2017. Of the 2016 shipments, desktops will total 103.5m units and notebooks 154.7m units. The report also suggests PC shipments will fall to 250m units in total by 2020. Desktops will drop to 93.1m units while notebooks will increase to 156.9m units.

Printers

Western European printer and multifunction shipments fell 1.5% YoY in Q3 to 5.3m units while the laser market enjoyed 1.9% YoY growth. Combined, revenues were on the up, with the printer market enjoying 3% YoY growth. In the UK however, units shipped performed poorly, falling 5.3% YoY, according to IDC.

 

Stat of the month: The largest amount of new products coming on the market occurred on November 8, with 46 products being launched in a single day.

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