January 2022

Welcome to this month's IT Market Alert from KnowledgeBus. This alert is designed to deliver some key market knowledge viewed during September 2021 that should help you get more from your IT procurement going forwards.

 

Executive Summary

  • PC shipments saw a positive year
  • DRAM, NAND prices to fall
  • Semiconductor shipments at record levels

35,992

The largest number of price increases happened from December 13th, with 35,992.

Jump to Monthly Stats

Fortunes in the IT channel continued on a positive note in December. CONTEXT Research publishes an index representing a four-week rolling average from 2019 to recall the pre-pandemic environment. The UK channel breached this index in late September and has been above it since. It recovered from a dip in late November that hit the top five European markets, and was at a quarterly high in mid-December.

COVID cases ticked up substantially beginning in mid-December driven by The Omicron-driven fourth wave, according to a Financial Times analysis of figures from Johns Hopkins University. While it was too early to see this factor show up in December's channel, the ramifications will doubtless show up in subsequent months.

 

Exchange Rate

The euro had a rocky ride against the dollar in December, with peaks and troughs that eventually saw it finish above its starting point. It began at 1.1325 on Dec 1 and immediately trended downwards to 1.1268 on Dec 7. It rebounded to 1.1317 on Dec 11 before falling back to its previous low of 1.1268 on Dec 17. An attempted rally reached 1.1309 on Dec 16 but sputtered, sending the currency pair to its monthly low of 1.1235 on Dec 18. From there, it recovered impressively to 1.1326 on Dec 23. After a brief plateau it delivered a final rise to finish out the month at 1.1342.

Things were more straightforward - and less positive - for the euro against the pound. It started the month at 0.8511, trying and failing to rally before succeeding on its second attempt to hit its monthly high of 0.8565 on Dec 9. From there, it was almost all downhill. Other than a brief halt on Dec 20, when it rallied to 0.8526 from 0.8486 the day before, it slid relentlessly towards its monthly low, bottoming out at 0.8394 by month's end.

The euro's poor mid-month performance against the dollar was down to a double whammy: the imposition of lockdown conditions in some countries and the US Fed's signalling of an interest rate hike next year. However it recovered after risk appetites improved towards the end of the month.

The Euro lost ground against the pound due to easing concerns about the economic impact of the pandemic along with expectations of interest rate increases from the Bank of England in 2022.

British Pound (GBP) per 1 Euro (EUR)

US Dollar (USD) per 1 Euro (EUR)

Euro (EUR) per 1 British Pound (GBP)

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

Price Changes and News Through December 2021

 

Phones and Tablets

Strategy Analytics said that Apple topped the 5G smartphone market in Q3 2021, followed by Xiaomi. Growth in Xiaomi's global 5G smartphone shipments stumbled in Q3 2021, due largely to a poor quarter in Europe. Samsung was to blame there with a strong showing in the region. Chinese brand Honor, formerly a Huawei sub-brand, grew the fastest in 5G phone shipments, followed by Samsung, who edged OPPO from second place into third.

Strategy Analytics expects the global smartphone user base to grow 18% between 2021 and 2026, driven by strong growth in the MEA, CEE and APAC regions. It expects a shortening of the smartphone replacement cycle, which stood at a record 43 months in 2020. It will rest at 39 months by 2026, the company said.

Tablets saw annual shipments grow 4.3% in 2021 but supply chain issues choked off Q4 shipments, causing an YoY 8.6% slip, IDC noted.

Traditional PCs

IDC reported 344.7m PCs in 2021, reflecting a 13.5% growth YoY, although the fourth quarter suffered a 3.4% hit as supply chain constraints bite harder. The company predicted a market cooldown as demand shrinks from a pandemic high. Expect a 3.3% CAGR from 2020-2025 nonetheless, driven mosty by notebook PCs.

Premium Ultramobiles & Wearables

IDC saw smart home devices grow 10.3% YoY in Q3 2021, reaching over 221.8m shipments despite shrinkage in China, which is the second largest company by shipment volume. Western Europe saw 17.9% growth, making it the fastest-growing market during the period.

Smart lighting grew by far the most, reaching 50.5% YoY during Q3, followed by smart thermostats at 23.9%. Home security grew 13.5%. The only category to shrink during this period was video entertainment, the biggest selling product group with a 35.3% market share. Shipments in this group fell 2.3% YoY according to IDC figures.

Wearables shipments grew 9.9% YoY in Q3 2021 to 138.4m units, IDC said. Hearables grew the most, at 26.5%, accounting for 64.7% of total shipments. Wrist wearables (fitness monitors) were the second biggest seller with 34.7% of the market but fell in shipment volume. Watches, a separate category in IDC's analysis, grew 4.3% driven mostly by increased in children's devices and exercise watches. Smart watches ilke Apple's are in no danger of losing traction, however.

Processors, MEMs, Semiconductors

The Semiconductor Industry Association noted a 23.5% YoY growth in global semiconductor sales during November, from $40.2bn to $49.7bn. Sales were up 1.5% QoQ. European YoY growth was the second strongest at 26.3%, after America's 28.7%. The industry set a new record for total units shipped, the SEI added.

Memory

TrendForce expects an 8-13% QoQ drop in DRAM prices during Q1 thanks to a seasonal downturn in demand. Inventory reductions among PC OEMs will staunch the flow and stop prices dropping still further. Expect a QoQ 5-10% drop in DDR4 prices during Q1 and a 3-8% drop in DDR5 pricing, the company added.

Storage

NAND Flash demand will slip in the first quarter as smartphone vendors ease procurement after the peak sales season, said TrendForce. That will leave a product surplus that drives down prices. Expect a 10-15% QoQ drop in ASP during Q1, it said. The surplus will be slightly offset by more orders for client SSDs from PC OEMs as the supply chain finds more access to semiconductor materials.

Displays

The worldwide market for PC monitors hit a speedbump in Q3 2021 following five consecutive quarters of growth, IDC said. Q3 shipments contracted 7.2% YoY to just over 34.8 units. Western Europe and the US felt the contractions, while APAC fared far better. Dell topped the vendors by market share in Q3, hitting 22% market share with 7.7m units. It saw impressive YoY shipment growth of 20.6%. Lenovo, TPV, HP, and Samsung filled out the rest of the top five slots in that order, with 12.2%, 11.4%, 10.7%, and 8.3% respectively.

Printers

According to CONTEXT Research, laser MFP prices continued strong in Europe through early December other than in France and the UK, where they continued to weaken. The UK's MFP prices have been losing steam since mid-September. Things are better in inkjet MFP pricing, where prices in the UK remained steady.

Consumables

Toner sales remain low compared to CONTEXT's index. The UK has trailed this index since the outbreak of the pandemic, and sales were even more muted in 2021 compared to 2020, it found.

Network Stats

IDC tracked a 7.5% YoY Q3 growth in global Ethernet switch revenues to reach $8.1bn. enterprise and service provider router revenues grew 4.7% during the same period to $3.8bn. Western Europe's market rose 16.7% year over year with strength from Germany, which grew 18.3%.

Revenues for enterprise wireless LAN access points increased 16.2% YoY in Western Europe, buoyed by a hearty 28.8% growth in Germany. Central and Eastern Europe increased 11.7%.

Worldwide, the enterprise WLAN market fared well with an 11.9% YoY growth to $1.9bn in Q3. The consumer market slumped 7.3% to $2.4bn, flattening growth for the overall sector to just 0.4%.

CONTEXT Research also saw a rise in European networking revenues. Sales for the three weeks to December 9 exceeded those in 2019 and 2020, the company said. The industry has dealt well with supply shortages but hasn't emerged unscathed, with SMB switches growing to €9.11 in October from €8.15 in January 2021. SMB WLAN access points saw a rise in ASPs to €128 in October from €108 in January 2021 but were down from a €153 September peak.

The UK saw better performance after spending most of 2021 lagging the European average for network investments, CONTEXT added. Revenues in week 46 (Nov 15-21) exceeded those for the same week in the prior two years. Still, beware the effect of product shortages and lockdowns, the analyst firm warned.

Monthly Stats

Price increases had a spiky month with six main peaks, beginning on December 1 at 35,637. Another three came early in the month when price rises hit 33,765 on Dec 6, 35,761 on Dec 10, and 24,451 on Dec 15. The last two saw price increases hit 30,108 on Dec 20 and 20,126 on Dec 30.

Price decreases were equally volatile, with notable highs on Dec 3 (30,099), Dec 8 (26,031), Dec 13 (35,992) and 30,336 (Dec 17). They also saw a last hurrah on Dec 27 when they reached 29,173. The fewest price decreases occurred on the first day of the month, at just 5,866. Extreme Networks made the most price increases and decreases during the month.

Stock increases rose to their monthly high early in December, reaching 9,835 on Dec 3. Other high points were 8,395 on Dec 7 and 7,090 on Dec 9. They fell to their low for the month on Dec 29, reaching 254.

Stock decreases peaked at 16,788 on Dec 10 after starting the month at 13,679. After that, there were fewer decreases overall, and they didn't see double figures again after Dec 21. The lowest day for decreases was Dec 28, at 1,256.

New Products December 2021

Prices and Stock Movements December 2021