October 2021

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

  • Supply chain woes tighten grip on market
  • Memory and SSD prices set to fall
  • Monitors perform well

38,760

The largest number of price increases happened from September 27th, with 38,760.

Jump to Monthly Stats

Product shortages topped the news this month, as CONTEXT research highlighted that for the past year, supplies of many products had been running low. The channel faces a two-week supply of notebooks and monitors, three-to-four weeks for desktops, and just half a week's supply of printers. Supplies for the busy Q4 period are looking grim.

Smartphone sales are up, especially in 5G models, while demand for PCs remains buoyant. However, contract prices for memory and SSD clients are likely to fall with demand during the fourth quarter due to rising inventory among manufacturers, indicating that the supply crunch isn't uniform across the board.

 

Exchange Rate

EUR/USD started September at 1.1824 and rose to its monthly high of 1.1880 on Sept 3, followed by a gentle decline throughout the rest of the month. The sharpest falls came between Sept 15 and 18, when it dropped from 1.1813 to 1.1723, and at the end of the month when slipped from 1.1684 on Sept 28 to finish at 1.1589.

Things were far more volatile against sterling. EUR/GBP began at 0.8591, falling to 0.8562 on Sept 4. It rose briefly to 0.8589 on Sept 7 before sipping to a low point of 0.8528 on Sept 11. Aside from a slight bump to 0.8543 on Sept 14, it stayed low until Sept 19, when it began a sharp rise to 0.8590 on Sept 22. From there, it dipped to 0.8547 on Sept 27 before ending a spiky month by soaring to its monthly high of 0.8624 on Sept 29. It dropped off slightly to finish the month ahead of where it began, at 0.8610.

The Euro's poor performance against the dollar was due in part to concerns over the future of Chinese property giant Evergrande, which spooked investors and prompted a flight to the dollar as a safe haven currency over the Euro. A 12% YoY rise in German producer prices during August also raised inflationary concerns.

Interest rates were a big factor in EUR/GBP. Mid-month, the UK Office for National Statistics revealed that inflation was at its highest level since 1997, driving the currency pair down. A hawkish Bank of England resolved that mood by leaving benchmark interest rates unchanged in a policy meeting towards the end of September.

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 September 2021

 

Phones and Tablets

 

Gartner saw worldwide smartphone sales to end-users grow 10.8% YoY in Q2 to $328.8m. The strongest growth for market leading brands was in countries with higher levels of 5G penetration. Pent-up pandemic demand continues to drive sales, it said. Samsung retained the top slot with a 17.6% market share, followed by Xiaomi, which grew its smartphone sales 80.5% YoY thanks to strong sales outside its core Asian market to reach a 15.5% share that knocked Apple into third place. Apple's share still grew to 15% from 12.9% YoY.

Counterpoint Research saw global shipments of mid-tier 5G smartphones (models priced between $200 and $399) grow 193% YoY during Q2 2021 to increase their share of total 5G smartphone shipments to 37% against 32% in Q1 2021.

Apple launched the iPhone 13 series, which Counterpoint expects to bump Q4 2021 5G shipments to almost 200m units. This will create a total of 605m 5G smartphone shipments for the year, the company said. Apple's share will rise from 24% last year to a third in 2021.

Traditional PCs

Demand for gaming PCs remains strong in the EMEA region, said IDC, with a 10.8% YoY revenue growth in Q2 to 2.5m units.

The analyst company expects the growth to continue, albeit at a lower rate than in recent quarters. It projects a 6.1% YoY growth in Q3 and 4.8% YoY in Q4. Growth will continue in the long term with a five-year CAGR of 2.5% through 2025.

Streaming and esports are driving especially strong growth in Western Europe, with YoY growth of 14.7% in desktops, while notebooks saw a softer increase of 4.9% YoY. Gamers will likely carry on with refreshing their rigs with new high-end GPUs, although ongoing supply shortages may dampen shorter-term demand.

CONTEXT found mobile PC revenues continuing to outpace pre-pandemic sales. From late June to early August they sat at 120 on its index, with 100 representing a four-week rolling 2019 average. Wi-Fi 6 is driving new notebook sales, it said. The share of enterprise laptops sold supporting this standard grew from 16% in May 2020 to 70% by early September 2021. Fewer consumer laptop buyers (57%) were adopting this technology by early September, it added.

CONTEXT warned that the UK had particularly low stocks of notebook computers in September at just over a week, compared to almost three weeks for Germany and 3.5 weeks for France.

Premium Ultramobiles & Wearables

IDC saw global wearable shipments grow 32.3% YoY to 114.2m in Q2 2021. Apple led the pack with 28% market share, down from 34.1% a year prior, it said. Next came Xiaomi with a 12.3% market share and an impressive 37.3% YoY growth in shipment volume. Huawei and Samsung, in third and fourth place with 10.2% and 8.5% market share respectively, also saw strong growth with 38.5% and 37.4%.

Processors, MEMs, Semiconductors

Global semiconductor industry sales grew 29% YoY to $47.2bn in August, which was 3.3% up from July. Europe saw the strongest YoY revenue growth at 33.5%.

In spite of revenue growth, supply chain problems show no sign of stabilising immediately. They extend back to the industry's most basic product: silicon. Bloomberg warned that a shortage in the raw material has sent prices soaring threefold in under two months, driven largely by a production cut in China, its biggest producer. Prices will remain elevated around current leaves through next summer until production ramps up, warned analysts.

The crypto boom has driven up GPU prices substantially, with NVIDIA and AMD graphics cards now sitting 70% above MSRP as we entered Q4, warned German analyst 3D Center.

Memory

DRAM prices will fall between 3-8% QoQ in Q4 thanks to rising client inventory levels, warned TrendForce, as supply outpaces demand. With demand for notebooks weakening, PC DRAM prices will suffer worse pullbacks than other categories, with prices expected to drop 5-10%. Server DRAM prices will also decline for the first time this year, although at a more moderate rate of up to 5%.

Storage

TrendForce saw NAND flash shipments for consumer electronics lag expectations so far during 2H 2020, forcing up inventory levels on the demand side. This is softening the shortage of NAND flash components, and the company expects contract prices to fall by up to 5% QoQ in Q4.

The analyst firm also expects a 3-8% QoQ drop in contract prices for client SSDs during Q4. The gradual return to the office as lockdowns ease across Europe is a factor here, as it has reduced the demand for Chromebooks and other clients suitable for home working. It's also seeing a slowing in demand for laptop computers.

The enterprise market for SSDs is different, and will see a rise of up to 5% QoQ in contract prices in Q4 thanks to strong data centre demand.

Displays

PC monitor shipments remained strong in H1 2021, according to IDC. Worldwide shipments were up 11.2% in Q2 to just over 35m units, due to pandemic-fuelled buying. The share of commercial shipments dropped, with consumers driving must of the demand this year. Supply remained constrained, with integrated circuits for display boards especially tight. IDC expects stabilisation in monitor component pricing as demand levels off, and we may see small declines between 2022 and 2024.

CONTEXT saw the UK come joint second across Europe in weekly revenues for desktop monitors during September, matching Spain and lagging only France. Monitors across Europe finished Q3 strongly, it said, exceeding all other products on the company's revenue index.

CONTEXT saw the UK come joint second across Europe in weekly revenues for desktop monitors during September, matching Spain and lagging only France. Monitors across Europe finished Q3 strongly, it said, exceeding all other products on the company's revenue index.

Printers

The supply shortage is choking the printer market, which according to CONTEXT research has just half a week of supplies in the European channel. IDC China has said that the COVID-19 situation in Southeast Asia and the chip shortage have combined to exacerbate the situation.

Network Products

IDC noted a 10.8% YoY growth in Q2 worldwide Ethernet switch revenues to $7.4bn. Western Europe's market rose 23.1% YoY. Things were less rosy in the global router market, which fell 0.5% YoY in Q2, with soft demand among service provider customers mostly to blame. Western Europe fared better with a 3.3% YoY growth.

The enterprise wireless LAN market remained buoyant in Q2, growing 22.4% YoY to $1.7bn. Consumer revenues fell 5.7% to $2.3bn, bringing overall WLAN revenues down to 4.6% YoY.

Western European enterprise WLAN revenues grew 21.0% YoY, with Germany contributing strong growth of 26.0%.

Monthly Stats

Price increases started at 33,142 but fell to 2,303 on Sept 7 before spiking to 30,460 the following day and then falling again to 6,656 on Sept 10. They then rose gradually to 31,600 on Sept 20, falling back to 6,935 on Sept 24 and then rising once again to finish the month at 32,381.

Prices down started low at 8,852 before rising to 37,134 on Sept 6. This was one of three peaks for price reductions in September, the others being 31,949 on Sept 13, and 38,760 on Sept 27.

Extreme Networks made the highest number of price increases and reductions in September.

Stock increases started low at 2,152 before rising to its monthly high of 9,933 on Sept 6. It saw three other notable high points, hitting 6,387 on Sept 8, 7,249 on Sept 13, and 8,462 on Sept 22. It also finished the month at 7,088.

Stock reductions started at a monthly high of 21,332 before dipping to 9,454 on Sept 6. From there, it saw three peaks: 13,818 on Sept 10, 14,044 on Sept 21, and 13,951 on Sept 29.

New Products September 2021

Prices and Stock Movements September 2021