IT Supply Chain Developments and Their Impact on Buying Decisions

Here is the latest* look at the IT market from Ian Nethercott, MCIPS, Supply Chain Director at IT digital marketplace Probrand.

IT is one of the most challenging categories of procurement, due to the proliferation of new products landing on the market each day. This creates a series of headaches for buying teams, such as weighing up whether the additional features that come with a new laptop model will drive productivity and be worth the associated costs. It may well be better to buy an older model, released months before, if they are now available at a lower price.

Making an informed purchasing decision may involve looking at patterns over time and evaluating macroeconomic factors, such as the impact of currency fluctuations.

To help you navigate this complex landscape, here are some of the latest developments and major movements that are impacting key IT product categories.

Exchange Rate

Exchange rates can play a significant role in fuelling price volatility in the IT supply chain, impacting everything from the cost of components going into a computer device to cross-border logistics charges. With most IT across the supply chain bought first in dollars, and then GBP, this impacts the final price.

In January, the euro started out at 0.8880 against GBP until the 16th, when it jumped up to 0.8896. It shortly went downhill, falling to 0.8726 by January 25th before ending the month down at 0.8769.

Against the dollar, the euro fluctuated much more. It started at 1.2000 and rose slightly before falling to 1.1942 by January 9th and then gradually rising for the rest of the month. It then reached 1.12247 on January 14th, rising to 1.2430 by the 25th. It ended the month up from where it started at 1.2394.

Buyers can track currency movements to see if they are having an impact on the end price. This is not always immediate however, and buyers should bear in mind that currency fluctuations happening today, can still have an impact next month as vendors look to recoup any losses they may have incurred as a result.

Phones and Tablets

January was an ideal opportunity to survey some of the ups and downs of Q4 2017. It was a rocky road for phones and tablets, with global shipments dropping 6.3% YoY in Q4 to 403.5m units, taking annual shipments down 0.1% to 1.472bn units as a result.

Apple took the Q4 vendor top spot with 77.3m units and 19.2% market share, down -1.3% YoY, followed by Samsung (-4.4% to 74.1m and 18.4%), Huawei (-9.7% to 41m and 10.2%), Xiaomi (+96.9% to 28.1m and 7%) and OPPO (-13.2% to 27.4m and 6.8%).

Phones and tablets are one of the fastest changing categories in IT, driven by new technologies and additional features. Fingerprint sensors are just one area currently being explored. According to TrendForce, a continued focus by Android devices will see smartphones with fingerprints increase to 60% market saturation.

Premium Ultramobiles & Wearables

We often see trends in the consumer market influencing tech in the B2B world and this is true with wearables. We’re now seeing smart footwear dominating industries such as healthcare, transportation and warehousing and this will likely start to filter through to enterprise. ABI Research predicts shipments will rise from under 1m units in 2017 to 9m by 2022.

VR also continues to be a hot topic with TrendForce announcing that global shipments are expected to grow from 3.7m units in 2017 to 5m units in 2018, with Sony set to hold on to the top of the leaderboard over Oculus Rift and HTC Vive.

Meanwhile, Gartner announced that premium ultramobile shipments grew from 50m units in 2016 to 59m in 2017 and that it’s likely this will grow to 70m in 2018 and 80m in 2019.

*published slightly later than usual - back to normal next month!


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