IT Supply Chain Developments and Their Impact on Buying Decisions

Al Nagar 1Al 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.

IT procurement leaders have kept a watchful eye on the turbulent euro in recent months, with ongoing instability in Greece one of the main catalysts for the currency’s bumpy ride. And yet September saw the euro’s fortunes change dramatically, with the Greek election a major contributor.

Alexis Tsipras’s radical left Syriza party won a clear majority, cementing his place after he struck a deal on a new €86 billion bailout. This brings the promise of  some security to the euro zone after much uncertainty about Greece’s future in the region.

This is a perfect example of how the euro’s movements can cause a ripple effect across the whole IT supply chain, impacting the end product price in a particular zone or region.

Exchange Rate

The euro had a strong month against the pound. It started at 0.7284 before creeping up to 0.7361 on September 3. From there, it experienced some peaks and troughs until September 20, when it finally dipped to meet its monthly low of 0.7226. It finished the month higher than it started at 0.7413.

The picture was a little different against the dollar. Here, the euro started at 1.1218, rising and then plummeting quickly to a monthly low of 1.1132 on September 5. It then rose to a monthly high of 1.1397 on September 19, followed by a sharp crash. It reached 1.1145 on September 24, before recovering modestly to finish at 1.1243, very slightly up on the start of the month.

Overall, the euro performed much better than it has in recent months, particularly against the pound, in part because of the Greek election. However its weaker performance against the dollar made it difficult for the channel to be economically effective when acquiring and shifting product inventory.

Phones and Tablets

According to Gartner, tablet shipments will reach 192 million units in 2015, down 13% from last year. The analyst firm also said that mobile phones would increase just 1.4% this year. This latter prediction includes feature phones, however, which are contracting. Smartphone shipments are on track for a 14% increase in 2015, driven by a 43% growth in the Asia-Pacific market. And yet this growth is still significantly slower than we’ve seen in recent history.

Premium Ultramobiles

The big news in the premium ultramobile market was the launch of Microsoft’s Surface 4, a faster version of its hybrid product, housing Intel’s latest generation Core processor. It also launched the SurfaceBook, a hybrid laptop product with separate graphics capabilities.

Premium ultramobile devices are the only category other than mobile phones to see overall market growth in 2015, according to Gartner. The company predicts sales of 44 million premium ultramobile devices (which include Apple’s MacBook Air) compared to 37 million units last year.

Printers

Gartner predicted that global shipments of 3D printers will reach almost 500,000 units in 2016, double the 244,533 units that it expects for 2015. This signals a shift from a niche to a broad-based global market for enterprises and consumers as businesses start to weigh up the possible return on investment. The education sector in particular is likely to drive the market forward in 2016, with schools and universities snapping up those lower-cost consumer 3D printers around the $2,500 price range.

Stat of the month: The largest number of price increases happened on September 2, with 25,402 rises in a single day.

 

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