February 2017

Welcome to this month's IT Market Alert from the IT Edition of KnowledgeBus. This alert is designed to deliver some key market knowledge viewed during January 2017 that should help you get more from your IT procurement going forwards.

 

Executive Summary

 

14,869

The largest number of price increases happened on January 2, with 14,869 rises in a single day.

Jump to Monthly Stats
  • Smartphone shipments reach new heights
  • Notebooks help stabilise PC market
  • LCD panel shipments are down

January proved a mixed month for the IT Channel. Smartphones enjoyed growth in production and shipments, notebook shipments achieved growth in western Europe, semiconductor revenues rose, and are expected to jump again in 2017. Server DRAM prices skyrocketed, and spending on 3D printers is expected to grow exponentially. Even the euro enjoyed some positives against both the GBP and USD.

On the downside, global PC shipments fell for the fifth consecutive year and shipments of LCD TV panels fell YoY.

 

Exchange Rate

 

The euro started strongly against the GBP in January, rising slowly from 0.8521 on Jan 1 to peak at 0.8802 on Jan 16. From there it was downhill, falling to a low of 0.8498 on Jan 26 before recovering and ending the month up at 0.8576.

British Pound (GBP) per 1 Euro (EUR)

 

After a dip from 1.0515 on Jan 1 to 1.0431 by Jan 4, it was positive news for the euro against the USD. Through a series of rises and minor falls, the euro gradually made its way to 1.0749 on Jan 24. The euro fell slightly, but recovered to 1.0731 by Jan 31.

The BBC reported that rising energy prices pushed inflation to a near-four year high this month, up from 1.1% in December to 1.8%. Reuters echoed this, saying the inflation increase is evidence the ECB’s 1.5tn euro cash stimulus was working, further noting the 19 member states were doing better than expected. Germany saw inflation rise 1.9% YoY, the highest since 2013, and Spain’s rose 3.2%. The Guardian said GDP rose 0.5% in Q4, growing faster than America’s, and praised the fall in December’s jobless rate to 9.6%. However, it pointed out that without the injection from energy prices, core inflation remained at 0.9%.

 

 

Euro (EUR) per 1 British Pound (GBP)

 

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

 

 

Price Changes

 

Price Changes and News Through January, 2017

Phones and Tablets

Global smartphone production volumes grew 4.7% YoY to 1.36b units in 2016, TrendForce reported. Samsung was the top vendor for the year despite a 3.3% drop in production volume on the back of Galaxy Note 7. In second place, Apple experienced an 11.5% YoY production volume drop to 209m units. Apple is expected to increase its production volume in 2017.

Global smartphone shipments grew 6.9% YoY to 428.5m units for Q4, while annual shipments grew 2.3% YoY to 1.47b units, the largest ever recorded. IDC also noted in Q4 Apple (78.3m units and 18.3% market share) topped Samsung (77.5m units and 18.1% market share) for shipments, while for the year Samsung (311.4m units and 21.2% market share) topped Apple (215.4m units and 14.6% market share) for shipments.

In other smartphone news, IHS says there will be six billion smartphones in use by 2020 up from 4b in 2016, with revenue from smartphones shipped to total $355b. Gartner suggests the number of organizations using smartphones in place of traditional access cards for physical access to organizations will rise from 5% in 2016 to 20% by 2020.

Traditional PCs

Global PC shipments fell 3.7% YoY in Q4 to 72.6m units and 6.2% for the year to 269.7m units, representing the fifth consecutive annual shipment decline, Gartner said. Lenovo held top spot in Q4 with 21.7% market share, edging out HP with 20.4%. Dell came in third with 14.8% of the market, while ASUS’s 8.5% drop saw it only just edge Apple for fourth place by 12,000 shipments.

IDC on the other hand said Q4 was a stabilizing period for PCs with 70.2m units shipped representing a global drop of just 1.5% YoY. Lenovo, HP and Dell held the top three spots, while IDC said Apple edged Asus for fourth by 0.1%. In another report, IDC noted Q4 notebook shipments to Western Europe enjoyed 2.7% growth.

Premium Ultramobiles/Wearables

Fitbit has announced it is laying-off 6% of its global workforce, Computer World reported, with the company stating a ‘soft-holiday period’ forced it to cut expenses. Fitbit’s preliminary financial results showed 6.5m units in sales and $580m in revenue for Q4, down from an expected $750m.

Processors, MEMs, Semiconductors

Global semiconductor revenue reached $339.7b in 2016, up 1.5% YoY Gartner reported. Intel was the top vendor for the second year in a row, with 4.5% YoY growth in revenue to $53.99b and 15.9% market share, while Samsung in second enjoyed a 6.1% increase in revenue to $40.14b and 11.8% of the market. Looking forward, Gartner says the market will rebound in 2017, predicting revenue to jump 7.2% YoY in 2017 to $364.1b.

Memory

TrendForce says server DRAM contract prices have already risen over 25% so far this financial quarter compared to the same point in Q4, leading to server manufacturers purchasing sufficient inventory before prices rise even further, which adds further demand.

PC World says Intel’s potential game-changing Optane, a memory and storage module, has been sent out to enterprise hardware makers for testing. The all-in-one product, developed with Micron and built on Intel’s 3D Xpoint technology, is designed to replace SSDs and DRAM in servers and PCs. Intel says it’s 10-times denser than DRAM.

Storage

Toshiba is spinning off its memory business to give the Toshiba-Western Digital alliance flexibility, better long-term financial stability and greater focus on the development and production of NAND Flash, with company operations and cost structures to be run as one, separate to the head company. TrendForce says the alliance currently represents 35% of the global NAND FLASH production, second only to Samsung with 36%.

Displays

TrendForce reported 2016 global LCD TV panel shipments dropped 3.5% YoY to 260.4m units. LG was the lead supplier with 52.94m units, down 4.3% YoY in volume production but overall up 5.3% in shipments, while Samsung produced 46.8m units, down 8.1% YoY, BOE Technology produced 43.64m units, up 22.4% YoY, and Innolux dropped 19.3% in volume to 41.73m units.

The shortage of panel supply in 2016 will see top TV brands source orders from captive panel suppliers, IHS said, with supply shortages set to continue into 2017. Previously the top vendors sourced from different makers, but after 2016’s panel supply shortage and unexpected high panel prices spikes, for stability they’ll increase reliance on their captive panel suppliers.

Printers

IDC predicts global spending on 3D printers, materials, software and related services will grow 22.3% from $13.2b in 2016 to $28.9b by 2020, representing a CAGR of 22.3%.

Network Products

ABI Research expects surging Wi-Fi traffic and new use cases such as IoT to bolster wireless integrated circuit shipments 54% by 2020. Crehan Research predicts that 25Gb and 100Gb Ethernet will comprise over half of all datacenter Ethernet switch shipments by 2021.

 

Monthly Stats

 

New products started at 0, rose to 5 by Jan 4, jumped to 41 on Jan 6, gradually fell to 16 by Jan 9, recovered, dropped to 6 on Jan 17, hit a high of 52 on Jan 19 and then fell again, hitting 2 on Jan 23-24. Another series of rises and falls followed, and new products ended the month on 12.

Cisco dominated both price increases and price reductions by manufacturer.

Price increases per day started at 6,749 and rose immediately to 14,869, only to fall to 3,517 on Jan 3. A rise to 12,998 on Jan 4 was followed by stability at 8,323 from Jan 6-8. Another quick jump to the month high of 19,925 on Jan 10 was followed by a series of rises, falls and three-day periods of stability, until sitting at 6,556 on Jan 31.

In the month’s first four days, price decreases per day jumped from 11,719 to 16,779, fell to 2,974 and recovered to 11,369. From there the prices enjoyed varying periods of stability, with highlights including a low of 1,947 on Jan 24, a high of 19649 on Jan 25. Daily price increases ended the month at 10,495.

Stock up started at 1,497 and jumped to 18,702 by Jan 5, only to then fall, sitting between 2,100-2,500 until a spike on Jan 14-15 from 2,163 to 29,528. The rest of the month was similar, including a last-minute jump from 2,046 to 20285 on Jan 31.

Stock decreases were similar, umping from 3,687 to 18,716 on Jan 3, falling, peaking at 28,044, and then sitting between 8,00-9,00 until Jan 16. The rest of the month was similar, eventually ending the month slightly down at 9,187.

New Products January 2017

 

Prices and Stock Movements January 2017