IT Supply Chain Developments and Their Impact on Buying Decisions

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

It was a mixed month across the IT channel in June. Reports highlighted that smartphones have registered a loss in volume but an overall increase in value. Meanwhile PC shipments continue to decline, wearables are on the up with semiconductor revenue posting huge YoY growth and printer shipments continue to increase.

We all recognise that the IT supply chain is hugely volatile, but these ups and downs can also act as an opportunity for IT category buyers looking to exploit key market influencers and secure the best product at the right price.

Exchange Rate

The euro started off poorly against GBP in June, falling from 0.8769 to 0.8739 on June 2. It then rose to 0.8793 by June 7 before jumping to 0.8806 by June 11. The euro then dropped hard, sitting down at 0.8735 from June 15-17. Another rise and fall was followed by a series of strong increases, with the euro eventually peaking at 0.8855 on June 29, only to finish the month at 0.8841.

It fared even worse against the USD, with the euro undergoing a series of peaks and troughs before ending right back where it started. Starting the month at 1.1675, by June 7 it had jumped to 1.808 before experiencing a slight drop to 1.792 by June 11. From there, the euro fell hard, hitting 1.1591 by June 15 and 1.1577 on June 20-21. A quick jump to 1.1675 on June 26 was dashed when the euro fell to a low of 1.566 by June 28, before recovering to 1.1681 by June 30.

Phones and Tablets

IHS reported that the iPhone X was the highest globally shipped smartphone model in Q1 2018 with 12.7m units, beating the iPhone 8 into second place with 8.5m. Samsung’s Galaxy Grand Prime Plus came in third with 8.3m units.

The EMEA smartphone market reported a drop in shipments but an increase in value for Q1, reaching 86.52m units with a sales value of $29.96bn. According to IDC, shipments to Western Europe alone dropped 8.2% YoY to 29.21m units.

Traditional PCs

According to PC Mag, traditional personal computers have continually declined QoQ since the second quarter of 2012, falling for 14 consecutive quarters to reach 61.7m units in Q1 2018, down 1.4% YoY. PC Mag’s report noted that HP, Lenovo and Dell accounted for 56.9% of global PC shipments, up 2.4% YoY. The smaller companies like Acer suffered the most, down from 9.74m units in Q2 2012 to 3.82m units in Q1 2018.

In other news, Dell is going public again after five years of private ownership and Gigabyte has told investors to expect a 20% QoQ drop in GPU shipments for Q2 to 1m units. Sharp will acquire Toshiba’s PC business, which holds just 0.6% of the global market with 0.9m units shipped in 2017.

Premium Ultramobiles & Wearables

Global wearable shipments are up 1.2% YoY to 25.1m units for Q1 according to IDC. Apple topped the list with +13.5% YoY to 4m units and 16.1% market share, followed by Xiaomi (+2.3% to 3.7m & 14.8%), Fitbit (-28.1% to 2.2m & 8.7%), Huawei (+147% to 1.3m & 5.2%) and Garman (+9.1% to 1.3m & 5%).

Looking ahead, IDC forecasts global wearable shipments to reach 124.9m units for 2018, up 8.2% YoY, and to continue at 12.5% YoY to 2022. Smartwatches are expected to dominate the market and account for 44.6% of all wearables shipped by 2022.

Monthly statistics

The largest volume of new products coming onto the market occurred between June 8-10, with 30,420 products launched in a single day.

We also saw several price increases occur. The highest number of increases happened on June 11, with 39,445 price hikes occurring across a variety of product categories.

Knowledge of price increases and decreases means buyers can spot key patterns to secure products at the best price. For instance, price increases were at their lowest on June 5 with only 3,698 occurring that day. This is potentially an opportunity for buyers to secure products that might be at the end of their cycle – when suppliers are trying to shift items to make way for new stock.

 

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