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 abreast of the latest developments and help support purchasing decisions.

The start of a new year brings with it a wave of technology predictions; from analysis of where new products will rank on the cool-o-meter, to scrutiny of the euro as buyers gauge its impact on the IT supply chain and end product price.

In a forecast summary, Gartner announced that IT spending will reach $3.54 trillion this year, up just 0.6% on spending for 2015. With a new financial year nearly upon us, procurement teams must separate the hype as they start to map out their budgets for the coming year.

Exchange rates

The back-to-school feeling following the Christmas break meant the markets didn’t truly kick off until January 4. Despite this, the euro had a strong start against the pound starting the month at 0.7374. Asides from a minor dip, it continued to rise from there, reaching 0.7521 on January 9 before hitting 0.7652 by the middle of the month. From there, it dropped to 0.7566 on January 23. This was followed by a slower rise to 0.7631 on January 28 before finishing the month at 0.7601.

The euro had a more dramatic series of ups and downs against the dollar, ending January only slightly below where it had started. Sitting at 1.0869 until January 4, the euro dipped to 1.0750 in the first week of January before rising sharply to 1.0921 on the 9th. It dropped off slightly from there before rising to 1.0910 on the 16th. Another slight drop was quickly followed with a monthly high of 1.0922 on Jan 20. It recovered well following a dramatic fall to 1.0796 on Jan 23, rising to 1.0910 on Jan 28 before finishing out the month at 1.0829.

Although the euro is facing a deflation crisis and manufacturing has started off slowly, with so many other economies in turmoil, the euro’s stability is starting to appear the safest option.

Interestingly, the pound’s two-month continuous slide against the euro is the longest since the latter was introduced in 1999. The US Federal Reserve’s decision to raise interest rates in December is seemingly helping the US dollar, despite the weakness in crude oil pricing which typically sends investors rushing to the euro.

Printers

3D printer shipments in China grew by 120% last year to 77,000 units; up from 34,000 in 2014. This was largely caused by the fact that desktop 3D printers have now dropped below $5,000; at the same time, we’ve seen a surge in government investments. According to IDC, China will overtake the US in 3D printer shipments in 2016, with another 100% increase in shipments expected for the year. The analyst business also released a new 3D printer report that predicts global spending on 3D printing to grow at a 27% compound rate from $11 billion in 2015 to $26.7 billion in 2019.

Notebooks and PCs

Holiday sales provided little respite for PCs in the last quarter of 2015 with global PC shipments down 8.3% to 75.7 million. According to Gartner, Q4 was the fifth consecutive quarter of global shipment decline, leading to annual shipments falling 8% to 288.7 million.

Inclusive of desk-based PC, notebook PC and ultramobile premiums, a report from Gartner stated that Lenovo held the highest Q4 market share with 20.3% and 15.4 million units shipped. HP, Dell, ASUS and Apple followed to make up the top five.

In other PC news, virtual reality technology is shaping up to be a potential bright spark for the PC industry with much-anticipated devices such as HTC’s VIVE, Oculus’s Rift and Samsung’s Gear VR 2 due to hit the open market later this year. Consumers will need to upgrade existing PCs to use the devices, so putting this into use may take some time; TrendForce predicts this won’t happen significantly until 2017.

 

Stat of the month: The largest number of price increases happened on January 19, with 28,000 in a single day.   

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