IT Supply Chain Developments and Their Impact on Buying Decisions

Continuing his monthly roundup of the latest from the IT market, Ian Nethercott, MCIPS, Supply Chain Director at IT digital marketplace Probrand, is here to help IT category buyers with their IT purchasing decisions.

May proved to be another mixed month in the IT channel with analysts announcing a series of Q1 results and annual predictions. Smartphone shipments dropped in Q1 and are expected to remain lower YoY in 2018 but rise again in 2019. Tablets also continued their decline, despite an appetite for detachable devices in recent months. PC sales are also expected to fall over the next five years.

For IT category buyers, this presents both opportunities and challenges when planning strategic purchases in what we all recognise is a highly volatile IT supply chain, and there are some key influencers to explore.

Exchange Rate

It might be a tad naïve to expect any currency to undergo a ‘nice and steady’ period but it was a particularly epic rollercoaster for the euro against the GBP in May. After jumping from 0.8794 on May 1 to 0.9936 on May 5-6 the euro fell, hitting 0.8750 by May 9. From there, it rose to 0.8810 on May 11 and 0.8812 by May 14, before dropping to 0.8729 by May 17. Staying low, the euro recovered slightly, rising to 0.8772 by May 22 before dropping to a monthly low of 0.8718 on May 29, only to jump back and end the month at 0.8778.

It fared even worse against the USD. Starting at 1.2029, the euro dived to 1.1856 by May 9. After a slight recovery to 1.1962 by May 14, the currency slid to a low of 1.1571 by May 29, before a quick rise to end the month at 1.1680.

The Financial Post said the economy feels like the crisis days of 2012 again, against a backdrop of Italian political turmoil and the euro slipping to a 10-month low. The Wall Street Journal was more positive, and said that consumer prices were up 1.9% YoY, with inflation rising to 1.1% from 0.7% in April.

Phones and Tablets

A slowing Chinese market impacted global smartphone shipments according to IDC, which announced a 2.9% YoY decline to 334.3m units. Nobody performed well – despite dropping 2.4% YoY, Samsung led the market with 78.2m units shipped and 23.4% market share, followed by Apple (+2.8% to 52.2m units and 15.6% share), Huawei (+13.8% to 39.3m and 11.8%) Xiaomi (+87.8% to 28m and 8.4%) and Oppo (-7.5% to 23.9m and 7.1%).

In another report, IDC said the global smartphone market is set to decline 0.2% YoY in 2018 to 1.462bn units but expects to see a 2.5% growth in 2019 to 2022 to 1.654bn units.

In tablet news, TrendForce announced a hefty 35% drop in global shipments in Q1 to 31.29m units, but this is expected to recover quickly in Q2, with 11.4% growth predicted - largely driven by the education market.

Traditional PCs

According to TrendForce global notebook shipments fell 15.7% in Q1 2018 compared to Q1 2017 and 1.4% YoY in Q1 to sit at 37.27m units. HP grew 4.4% YoY to hold 24.1% market share, above Lenovo (-1.6% YoY to 21.2%), Dell (+14.5% to 16.6%), Asus (-9.3% to 8.9%) and Apple (-15.1% to 7.7%).

IDC said that combined global shipments of personal computing devices and tablets will fall 3.5% YoY in 2018 to 408.3m units and continue at a rate of -1.8% to 386.2m units by 2022.

Premium Ultramobiles & Wearables

Wearables still seem to dominate the headlines when it comes to flashy new tech, but are we beginning to see them reach their potential for business use? It seems we’re getting there, with IDC predicting global spending on AR and VR will grow 92% YoY to $27bn in 2018, continuing to grow at 71.6% through to 2022.

The analyst also reported on the demand for detachable tablets, with global shipments set to rise from 23.9m units in 2018 to 35m units by 2022.


Enterprise SSD shipments are expected to reach 30m units in 2018, TrendForce reported. Oversupply in Q2 is expected to see contract prices fall 10% on Q1.

In a separate report, TrendForce said oversupply of NAND flash has led to a decrease in SSD prices, which has increased demand and will help SSD adoption in notebooks exceed 50% by the end of the year.

Both of these movements could be a golden opportunity for buyers looking to bag a deal.

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