IT Supply Chain Developments and Their Impact on Buying Decisions

Here's the latest look at the IT market from Ian Nethercott, MCIPS, Supply Chain Director at IT digital marketplace Probrand, to help you with your IT purchasing decisions.

With the first quarter of the year having been a relatively busy period for the IT channel, this month’s review will also look at many of the predictions being made by analysts for the year ahead. This will help you stay up to speed with the latest developments and major movements impacting the complex world of IT procurement.

Exchange Rate

After a promising start in March, it was mainly downhill for the euro against the pound. Starting at 0.8874, the euro initially shot up to 0.8938 by March 7 before falling. It eventually hit a low of 0.8724 by March 22, which was followed by a small recovery, with the euro ending the month at 0.8789.

It was more mixed for the euro against the US dollar. Starting at 1.2204 and jumping to 1.2413 on March 4, the euro dropped, recovered, and fell again before slowly rising to 1.2421 by March 27. A final drop saw the euro sitting at 1.2321 on March 31.

With most IT across the supply chain bought first in dollars, and then GBP, keeping an eye on currency fluctuations means buying teams can spot patterns and predict the smartest time to buy, depending on when the strength or weakness of a currency falls in their favour.

Phones and Tablets

According to a GlobalData survey, the number of devices per person in the UK – including phones and tablets – reached a high of 3.5 towards the end of 2017, up from 3.1 the previous year. The demand for ‘work phones,’ as well as personal devices, is one factor contributing to this. New technologies and additional features means new and improved devices are also coming to market on an almost daily basis, prompting many buyers to reach for the latest model.

TrendForce says full-screen smartphones will rise rapidly from 8.7% in 2017 to 44.6% in 2018, and eventually 92.1% market saturation by 2021. In another report, the company said that it expects 3D sensing adoption to grow from 2.1% in 2017 to 13.1% in 2018, with Apple leading the market.

Of course, new features can impact price. According to IHS, rising DRAM and NAND flash prices are set to see the cost of materials for the new 64GB Samsung Galaxy S9+ increase $43 per unit from last year’s GS8+ to $375.80 per unit.

Traditional PCs

According to IDC, Western Europe’s personal computing market – encompassing desktops, notebooks, workstations and tablets – is expected to fall 3.3% YoY in 2018 to 76.3m units and another 3% YoY in 2019 to 74m units.

Some positive news comes by the way of commercial notebooks and detachable tablets that will help see commercial shipments up 0.8% YoY in 2018.

In other news, Context announced that sales of PC workstations in Western Europe grew 11% YoY for the first two months of the year. The Netherlands topped the list with 38% YoY, while the UK reported a steady 9%.

 

Voices (2)

  1. Secret Squirrel:

    Re: “keeping an eye on currency fluctuations means buying teams can spot patterns and predict the smartest time to buy”

    If I could do that, I wouldn’t be a buyer. I’ve be running my own currency hedge fund and have made millions.

    A purely random walk is as good an indicator of exchange rate predictions (in a practical buying period of weeks or months) as any fundamental or technical analysis. Predictions can be made but over a long term period (3+ years) but anything shorter and it’s pretty much random. Have a read of https://voxeu.org/article/time-random-walk-loses to understand more.

    Secret Squirrel BA (Econ) (Hons)

    1. Peter Smith:

      That’s a great point and you are quite right. I remember trying to explain to a Board years ago that elevating a currency decision (whether to “cover” a forward purchase of a food commodity) from mid manager to Board level really didn’t make it any more likely to be correct!

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