• IT Supply Chain Insights - July 2016

Welcome to this monthly IT Supply Chain Insights. This monthly alert will keep you up to date with market trends and IT channel news giving you the knowledge you need to save time and money buying IT.

 

Executive Summary

 

21,164

The daily total price increases reached 21164 on 2nd June, remained at 15059 for three days.

Jump to Monthly Stats
  • UK became Western Europe’s largest detachable market
  • Smart TVs now over 50% of the market
  • Semiconductor revenue is expected to fall in 2016 but is set to increase again in the following two years

There seemed to quite a lot of positives outflowing from the channel this month even with minor losses to revenue and shipments. June also proved a tense time for the euro and the pound both in the lead up to, and consequence of the UK Brexit referendum.

The euro increased strongly from the GBP this month while contrary to the USD it looked strong early but crashed hard.

Smartphones are expected to keep up growth in both revenue and shipments in 2016, yet they still remain less than preceding years, while tablets and PCs maintain their downward spiral. The detachable market keeps growing well, panels and printers are up and NAND flash is steady. However, semiconductor sales, DRAM prices and storage have all remained down.

 

Exchange Rate

 

The euro gained plenty of traction from the GBP in June, first with a slow and steady increase from 0.7715 on 1st June to 0.7943 on 14th June. After a dip to 0.7661 by 23rd June, the euro shot upward, first to 0.8104 on 25th June and again to 0.8304 on 28th June, finishing the month at 0.8291.

US Dollar (USD) per 1 Euro (EUR)

Exchange Rate Graph EUR vs USD for July 2016

The European currency presented some similarity from the US dollar, first increasing from 1.1150 on 1st June to 1.1365 on 4th June. It stablised for a couple days and then dropped to 1.1249 on Jun 11. After a well-balanced week the euro rose again, this time it rose to 1.1336 on 20th June, simply to fall, rise and then crash hard, falling from 1.1353 on 23rd June to 1.1021 on 27th June, and ending the month at 1.1104.

Every single report on the Eurozone this month is based upon the UK referendum. Following the Brexit vote, the GBP plummeted against other markets, with further reports suggesting that an EU reform has become a necessity. Analyst firm Canalys provides statistics which indicate that IT spending in the UK is currently set to drop by 10% in 2016 and possibly even further in the following years.

British Pound (GBP) per 1 Euro (EUR)

Exchange Rate Graph EUR vs GBP for July 2016

 

Euro (EUR) per 1 British Pound (GBP)

Exchange Rate Graph GBP vs USD for July 2016

US Dollar (USD) per 1 British Pound (GBP)

Exchange Rate Graph GBP vs EUR for July 2016  

Price Changes

 

Price Changes and News throughout June 2016

Phones and Tablets

Smartphone sales are looking to rise 7% YoY to 1.5b units in 2016, this is down from 14.4% growth in 2015 due to the saturation in key markets and extended device life (average 2.5 years). India has become the prospective market for sales, forecasting 2016 sales to cultivate 29.5% YoY, while Western Europe's future growth will continue steadily to slow, states Gartner.

Similarly, it is anticipated that shipments will drop in 2016, with IDC forecasting just 3.1% YoY growth for smartphones, down from 10.5% in 2015 and 27.8% in 2014. Android are anticipating growth of 6.2% YoY with 1.24b shipments and 83.7% market share, while iOS will drop 2% YoY to 226.8m units and 15.3% of the market, raising alarms for Apple and suggesting 2017 trade-in deals to simply help regain growth. China, that said to be a saviour for Apple, just banned iPhone 6 sales in Beijing, citing patent breach on Chinese phones. The order is pending review by the Beijing IP Court, but will be causing some stress in Cupertino.

In 2016 tablet shipments will again decline, which will mark the second year in a row with 9.6% down on 2015. In spite of the continual decline, IDC forecasts annual tablet shipments to attain over 100m annually through 2020, with smaller screens and cheaper prices driving demand, especially in emerging markets.

Notebooks and PCs

Worldwide PC shipments will fall 7.3% YoY in 2016 to 255.5m units, 2% below IDC's earlier projections following Q1's greater than expected 12.5% drop. Notebooks will account fully for 59.6% of the market with 152.3m units, while 103.3m desktops will ship globally this year.

The worldwide education PC market in 2016 is slower than anticipated with Q1 shipments reaching 2.04m units, up 9.5% YoY but down on the double digits of 2014/2015 according to Futuresource. Windows obtained growth of 6% resulting in 46.1% of the market, gaining share contrary to the Chromebook, where 90% of sales stay static in the US. Windows 10 recently hit a major milestone, reaching 25% of the UK market and joining the US, Western Europe and Australia and now is proving to be more popular than Windows 7.

Premium Ultramobiles

Detachables will return tablets to growth in 2018 returning to attain 31% market share by 2020, up from 16% in 2016. Windows held 70% of the detachable market in 2015, and expects it to possess 49% in 2016 and 51% by 2020, while Android will fall from 16% in 2015 to 12% in 2016, and up again to 20% by 2020, states IDC. iOS is expected to go up from 14% in 2015 to 28% in 2016 and 29% by 2020.

In Q1, the UK overtook Germany and became the largest detachable market in Western Europe with 300,000 units and 23% of every detachable unit shipped in Europe.

The introduction of the iPad Pro also helped increase detachable shipments to the UK, extending Apple's market share to 21%. However, Microsoft's Surface Pro line still holds over a third of the business market.

Sony opened pre-ordering for PlayStation VR this month after the release of HTC's Vive and Oculus's Rift. TrendForce predicts VR shipments will reach 9m units in 2016 and 50m units by 2020, when the worth of the global VR market is likely to will undoubtedly be $70b.

Processors, MEMs, Semiconductors

April semiconductor sales dropped by 1% in March and 6.2% YoY to $25.8b, the Semiconductor Industry Association reported, with Europe (-8.6%) and the Americas (-14.8%) falling the hardest.

The report also permitted a World Semiconductor Trade Statistics (WSTS) forecast suggesting 2016 global semiconductor sales will reach $327.2b, down 2.4% YoY. 2017 sales will grow 2% to $333.7b and 2018 another 2.2% YoY to $340.9 billion.

In other news DRAM's long-term slump continued with average selling prices falling for the 19th consecutive month in May.Trendforce suggests Q3 will discover a pick-up with peak PC production and the release of another iPhone, and hopes that 2017 will become a stabilising year for the market.

Memory

According to DRAMeXchange, NAND flash prices enjoyed a constant rise over Q2 on the rear of a decrease in shipment shares to satisfy demand. A power outage within one of Samsung's fabrication plants will probably create a supply shortage which, along with a greater demand for smartphones, tablets and SSDs, are set to push Q3 NAND market growth.

Storage

Q1 EMEA external storage revenue fell 4.9% YoY to $1.64b,IDC reported. By segment HDD revenue dropped 23% YoY to $710m, while all-flash systems grew 96% annually to $215.8m and hybrid flash 4% YoY to $713.2m. Flash arrays experienced triple-figure growth to account fully for 60% of total shipments.

Regionally, the Western Europe storage market fell 4% YoY for Q1 with revenue reaching $1.2b and total capacity shipped was down 11% YoY to 2.18 exabytes.

Global enterprise storage also fell in Q1, down 7% YoY to $8.2b while capacity shipped fell 4% to 27.8 exabytes, states an IDC report. HPE and EMC tied for the most effective vendor spot with HPE enjoying an 11% YoY revenue growth to attain $1.4b revenue and 17.3% market share. In second place with a 16.4% market share was EMC, which saw an 11.8% YoY fall in revenue to $1.3b.

Displays

Over 50% of all TV sets shipped in Q1 were smart TVs, HIS reported, this is a noteworthy milestone for the industry. China led the rise in smart TV shipments (80% of most shipments) and North America (56%), while shipments to Europe (40-45%) and Japan (38%) stagnated.

A panel market breakdown of units shipped in May that was released by TrendForce, noting large-size LCD panels reached 60.25m units, up 6.5% in April. In this month monitor panels grew from 7% to 11.99m units, notebook panels were up 17.7% to 13.88m units, and tablet panels up 4% to 13.28m units.

Printers

In accordance with IDC, 3D printer shipments grew nearly 20% YoY in 2015 in the US, which expects them to cultivate more than 16% annually through 2020. They also predicted that the global 3D printer market will reach over $17.8b in revenue over the following five years, with hardware alone developing to 38% annually from $1.8b in 2016 to $6.4b in 2020.

IDC also noted the production printer market enjoyed 7.9% YoY growth with shipment value increasing 1.4% to $1.2b. Global shipments of large format printers also grew in Q1, up 1.2% YoY and revenue up 7%. The IDC report also noted that HP held double the market shares of another vendor with 40.5% and 33,100 shipments.

Network Products

Global server revenue fell 3.6% YoY to $12.4b in Q1 and shipments down 3% YoY to 2.2m units, therefore ending a seven quarter revenue growth. In line with the IDC report, HPE held the very best spot with $3.3b and 26.7% market share, followed closely by Dell ($2.3b and 18.3%) and IBM ($1.1b and 9.2%).

IDC released a written report on the global WLAN market, which it said grew 4.5% YoY in Q1, driven by the enterprise segment's 8.6% YoY growth. Cisco held the most truly effective vendor spot and enjoyed a revenue increase of 2.7%, with a market share of 45.2%.

 

Monthly Stats

 

New services fell instantly from 572 to 40 on 2nd June, before seeing a rise and peaking at 808 on 10th June. Another drop and quick recovery to 512 on 14th June was followed a low flattening of the market, first dropping to 32 on 17th June, then to 1 on 28th June, ending the month at 32.

It was HP that yet again dominated new services by brand, meanwhile Cisco led both price increases and price reductions by manufacturer.

The daily total price increases reached 21164 on 2nd June, remained at 15059 for three days, increased to 21083 by 6th June and dropped to 5109 by 9th June. Then they amended, reaching 24109 by 14th June, and then ranging between a low of 3624 on 21st June with a peak of 29559 on 28th June. They finished the month where they started at 8514.

Price decreases each day were just as inconsistent, first dropping from 22169 to 8059 on 2nd June, improving, then fluctuating. Highlights included a decline to 2306 on 7th June, and a rise to 29242 on 21st June. Price decreases ended the month at 21887.

The five key focal points of the month where overall stock movements reached their highs and lows were on 2nd June, 9th June, 22nd - 23rd June, 28th June and 30th

New Products March 2016

New Products Graph for July 2016

Prices and Stock Movements March 2016

Prices and Stock Movements Graph for July 2016

 



Get this monthly IT supply chain news direct to your inbox

Subscribe now

Recent Issues

Sorry to bother... but enjoying the article? Subscribe to our FREE newsletter and get these straight to your inbox!

Join 40,000+ subscribers and get marketplace guides and advice delivered about once per week

I am happy to recieve marketing from Probrand

We promise to do nothing evil with your information, you can unsubscribe at any time through your preference center link.