IT Supply Chain Developments and Their Impact on Buying Decisions

Ian Nethercot, MCIPS, Supply Chain Director at IT digital marketplace Probrand, continues his monthly roundup of the latest movements in the IT market to help with your buying decisions.

June was a month of mixed fortunes for the IT channel. Smartphone, tablet and PC shipments were down along with smartphone production volumes, enterprise storage and semiconductor revenues. In positive news, gaming PCs and monitors were forecast to grow, while wearables posted major shipment growth.

To help IT buyers maintain a clear view of what represents a fair price, here are some of the latest developments and major movements that are influencing key IT product categories.

Exchange Rate

It was a strong month for the euro against the GBP in June. Starting at 0.8834, it rose to 0.8872 by June 4th. After a minor dip, the euro climbed to 0.8909 by Jun 11th only to drop to 0.8893 by June 15th. From there it jumped to 0.8937 by June 18th, fell to 0.8888 by June 20th and then rose steadily to peak at 0.8963 before ending the month at 0.8948.

It was a similar pattern against the USD, starting at 1.1168, rising to 1.1329 by June 8th, dropping to 1.1205 by June 15th, and hitting a high of 1.1388 by June 24th before ending the month at 1.1366.

Reuters announced that the eurozone economy slowed again in May, with the Purchasing Managers’ Index (PMI) coming in at 47.7, down from 47.9 in April, and then dropping to 47.6 in June.

Meanwhile, FXStreet said that May recorded its lowest unemployment rate since July 2008 at 7.5% while The Express said that business confidence fell to its lowest level since August 2016.

Phones and Tablets

Smartphone shipments to the EMEA region dropped 3.3% YoY in Q1 to 83.7m units. This had a much more dramatic impact on retail sale value which was down just over 10% according to IDC. Samsung topped the vendor list with 15.7m units and 29.47% market share, ahead of Huawei, Apple, Xiaomi and HMD.

According to TrendForce, global smartphone demand has dropped, with volume production set to fall 5-7% YoY to 1.4bn units in 2019.

Lastly, IDC expected shipments of slate tablets to drop 4.4% YoY from 113.9m units in 2019 to 95.1m units by 2023.

Traditional PCs

Global PC shipments including desktop, notebooks and tablets, are set to drop 3% YoY in 2019 to 392.5m units, according to IDC. Shipments were also predicted to drop at 1.6% YoY to 367.7m units.

The analyst firm also noted that global gaming computers (desktop and notebook) dropped 6.2% YoY to 7.5m units in Q1. Gaming seems to be big news – looking ahead, gaming desktops are forecast to grow 3.2% from 15.4m units in 2019 to 17.5m by 2023, with gaming notebooks set to rise 8.8% YoY from 19.4m units in 2019 to 27.2m units in 2023.

Premium Ultramobiles & Wearables

According to IDC, European wearable shipments grew 118.5% YoY to 10m units in Q1, with ear ware (up 298% YoY) accounting for 40.1% of all shipments, ahead of watches (35.6%) and wrist bands (22.9%).

By vendor, Apple led the market with 3.4m units and 33.8% market share, ahead of Samsung (1.59m and 15.8%), Xiaomi (0.87m and 8.6%), Fitbit (0.83m and 8.3%) and Garmin (0.64m and 6.4%).

In another report, IDC forecast that wearable shipments will reach 222.9m units for 2019 and grow 7.9% YoY to 302.3m units by 2023. Smartwatches will reach 91.8m and 41.2% market share, while ear-worn devices will sell 72m units and account for 32.3% market share.

Monthly statistics

The number of new products that came onto the market was drastically low, with a high of 237 new products launched on June 18. This is the lowest it’s been all year, compared to a high of 1,698 new products launched on May 14th, 5,106 launched on April 15th, and 2,922 on March 18th.

The highest number of total price increases happened on June 3rd, with 60,509 price hikes occurring across a variety of product categories. At the opposite end of the scale, price decreases in June hit a high of 42,275.

You can listen to Ian's fuller observations here.


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