Welcome to this months IT Supply Chain Insights. This monthly newsletter keeps you up to date with market trends and IT channel news giving you the knowledge you need to buy IT for less.
The largest number of price increases happened on the 4th August, with 57,070.Jump to Monthly Stats
- Q2 smartphone shipments down by a fifth YoY
- UK leads Western Europe with skyrocketing notebook PC sales
- Home-bound consumers are buying more wireless LAN equipment
The UK continues to struggle through the pandemic, with an effect on channel fortunes. CONTEXT Research's Q3 guidance pointed to a 10.2% reduction in channel sales during Q3, lagging a European average of between 1.5% and 4.5% growth. August's four-week rolling tech channel sales in the UK saw almost everything falling, save for online business retail, which grew 20%, and online consumer retail, which grew 8%.
The pandemic continued to have a profound impact on the technology sector in August, with fallout dusting everything from smartphones to servers. Smartphone shipments continued to drop, and analysts don't expect a proper recovery to pre-pandemic levels before 2022. There were bright spots in the industry. We saw sales increases in the notebook and WLAN markets, but mostly in the consumer space.
The euro's gain against the dollar in August was tidal, surging forward and then pulling back in waves before finishing the month on a high. It began the month at 1.7775, falling slightly to 1.1753 on Monday Aug 3. Then it washed in again to hit 1.1865 on Aug 6, receding to 1.1756 on Aug 11. Another surge saw it hit 1.1914 Aug 18 before raking back to 1.1795 Aug 22. It finished at 1.1923.
Things were different against the pound. The euro began the month at 0.8993, arcing through a peak of 0.9035 on Aug 5 and dipping to 0.8986 on Aug 11. It arced again for ten days, peaking for the month at 0.9053 on Aug 17 before hitting another trough at 0.8984 on Aug 21. After a half-hearted rally, it lost steam and tanked to 0.8914 on Aug 29, limping in at 0.8933 on Aug 31.
The euro's rise against the dollar is remarkable, especially given the dire figures from Eurostat in mid-August, which noted a 12.1% drop in GDP and a 2.8% fall in employment in the Euro area in Q2. This is due at least in part to assumptions that Europe's social and economic recovery from the coronavirus will beat the US. Stronger currencies are a mixed blessing, though, and the European Central Bank is getting antsy about the strong euro's affect on exports.
Price Changes and News Through August 2020
Phones and Tablets
Gartner saw a 20.4% YoY drop in global smartphone shipments during Q2. IDC predicted a 9.5% decline in smartphone shipments throughout the year to 1.2bn. The market will recover by 2022, it said, driven by 5G phones, which will capture 50% of the market globally the following year. It anticipates an average selling price of $495 globally in 2023. There will be a YoY growth of 9% next year, it said, but that's warped by the grim decline in 2020 sales. 2022 will be the first year of recovery to pre-coronavirus levels.
More than a third of all phones sold in the UK (35%) sold online in Q1, a figure topped only by India at 40%, according to Counterpoint Research.
Notebook sales in Western Europe continued to fare well in Q2, said CONTEXT, with shipments up 55% YoY. Commercial sales fared best, rising 70.4%m with consumer sales still enjoying a respectable 38% rise.
This all happened at the expense of desktops, which fell 27.8% YoY during the quarter. Commercial sales took the brunt (down 31.6%) with consumer products down 17.5%.
The UK saw the most extreme rise in notebook sales, at 103.5%. It also saw a bigger fall in desktop shipments than the Western European average, down 36.3% .
Premium Ultramobiles & Wearables
Wearable device shipments grew 14.1% YoY from 75.5m to 86.2m in Q2 according to IDC, which noted that hearables were the driving force. They grew 32.6% and accounted for 60% of all wearables during the quarter. Watches and wristbands represented 39.2% of all shipments, down from 46.8% a year prior.
Processors, MEMS, Semiconductors
Intel, which could do with some good news after a protracted period of supply shortages, officially announced its first 11th generation Tiger Lake laptop processors. They're still built on 10nm processes but feature a new architecture. Expect to see thin-and-light laptops shipping with them in the autumn, it said.
DRAM revenues grew 15.4% to $17.1bn QoQ during Q2 as prices and bit shipments rose, according to DRAMeXchange. Expect soft prices in Q3, though, as customers manage high inventory levels. Server vendors will feel that glut first and will lead the price drop, it warned. That won't be helped by a projected 4.9% QoQ decline in Q3 server shipments, thanks mostly to a rise in cloud migrations. You can blame that on the pandemic, and it's a big issue for server vendors. The original Q3 forecast saw a more digestible 0.8% shipment drop.
IC Insights says that while DRAM may recover slightly in 2020, the three big manufacturers are being cautious and keeping capital investments low. Samsung will trim its DRAM capex investment 21% to $4.9bn, SK Hynix's will drop 38% to $4.0bn, and Micron's will fall 16% to $3.6bn, it said.
NAND flash revenue rose 6.5% QoQ to $14.5bn during Q2, said TrendForce. It saw a 3% hike in both bit shipments and average selling price. Those components were not destined for smartphones, though, which actually used fewer of them in Q2. Instead, they were thanks largely to increased demand for cloud services during the pandemic.
Component manufacturers AO Optronics said that LCD panel prices were rising on tight supply. DigiTimes also forecast significant growth in curved monitor shipments next year.
Western European MFP unit shipments fell 10.4% in YoY in Q1 to 3.70 million units, but revenues fell by a third, IDC said. The figures were all in written in red toner, not ink, with laser shipments dropping 22.7% compared to a 3.9% drop in inkjets. The UK market overall dropped 4.6%, gentler than original forecasts thanks to better than expected inkjet sales. A3 MFP sales fell by three quarters in the UK while A4 monochrome printers actually grew a little.
IDC saw worldwide hardcopy peripherals shipments fall 10.2% YoY to nearly 20 million units in Q2. HP led the market with 8.1m unit shipments, despite a 14.0% YoY decline in shipments. Canon came a distant second with 4.2m (up 1.6%), followed by Epson (3.1m, down 19.3%), Brother (1.7m, down 2.5) and Lenovo, which limped in with 485,817 units. That last figure may be comparatively small but it's up a whopping 40.8% on Q2 2019.
CONTEXT saw ink tank-based printer shipments soar in Western Europe during Q2 compared to the same period in 2019. In the UK, they grew 204.2% in April, 188.4% in May, and 68% in June (all YoY).
CONTEXT saw a 16% rise in ink cartridge sales in Europe since the lockdown began. People seem to be printing more things while they're at home
The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments rose 7.1% YoY in Q2, said IDC, but that all came from the consumer market, which grew 20.3% YoY. The enterprise segment declined 9.5% year over year in 2Q20 with $1.4 billion in revenue.
Wi-Fi 6 is on the rise, making up up 28.9% of revenues in the enterprise Wi-Fi market, up from 21.8% in Q1. It fared less well on the consumer side, with 802.11ax units comprising 3.6% of shipments and 9.5% of revenues.
Focusing the lens on Europe, CONTEXT Research found Q2 home networking products growing 35% YoY, driven mostly by extenders (77.4%) and mesh systems (59.5%).
New products started low at 33 before spiking on Aug 7, reaching a monthly high of 1,573 on Aug 10. It then fell again, ranging in mid-double figures interrupted only by a brief blip on Aug 24, when it hit 275, and dropped to single figures on Aug 18 and Aug 27-30.
Prices up saw two big fluctuations, hitting a low point on Aug 20 and a large spike to 40,290 on Aug 24. Price decreases saw three big spikes, with the first and most pronounced on Aug 4, when it reached 52,517. The others happened on Aug 21-21, when it hit the mid 30,000s, and on Aug 25 when it broke 42,000. Decrease volumes enjoyed a last hurrah on Aug 28, hitting 36,022.
Stock up stayed mostly flat for the month, with slight bumps on Aug 4 to 7,554 and Aug 18 to 5,668 before peaking in the only really notable spike to 10,615 on Aug 24. Stock down ranged between around 10,000 and 12,000 for the month, other than a spike and fall between 13,300 and 8,863 on Aug 3 and Aug 5 and a brief climb to 13,114 on Aug 17.