November 2020

Welcome to this month's IT Market Alert from KnowledgeBus. This alert is designed to deliver some key market knowledge viewed during October 2020 that should help you get more from your IT procurement going forwards.

 

Executive Summary

  • Channel fortunes rose in October
  • Smartphone sales decline slowed down
  • Memory prices depressed as inventories remain high

54,399

The largest number of price increases happened on October 8th, with 54,399.

Jump to Monthly Stats

It's been a rough year, but things seem to be picking up. CONTEXT Research noted that the UK and Ireland IT channel joined almost all other European countries in trending higher than the 2019 four-week rolling average for revenues at the turn of October after trailing that average for around six weeks. The UK represented 14% of European volume sales through distribution in Q3 and 68.2% of value sales, it said. Volumes and revenues rose substantially across the UK channel during October. In Europe overall, mobile computing, monitors, computing accessories, and audio-video systems were hot spots for distribution sales during October, while computing components and infrastructure suffered, as did software licences and IT services.

Gartner has predicted a rise of 4% in worldwide spending during 2021 after declines across the board this year. Enterprise software stands to grow the most next year, at 7.2%, after a 3.6% decline this year. Devices, which suffered the biggest hit in 2020 with a 13.4% revenue drop, will see a 4% bump, the company said.

 

Exchange Rate

The euro had a roller coaster ride against the dollar in October. It started the month at 1.1742 before sinking slightly and then beginning a rise at the start of the following week, reaching 1.1823 on Oct 10. From there, it fell gradually to hit 1.1714 on Oct 16, languishing there only briefly before picking up again to reach 1.1855 Oct 21 and then a high of 1.1856 at the end of the week. The final week of October saw it plummet sharply, finishing the month at a low of 1.1643.

The euro's pattern was similar against the pound, but if anything it was more pronounced. It began the month at 0.9100, slipping to 0.9050 by the end of that week. It rallied to 0.9114 by the middle of the next week (Oct 7), falling to 0.9061 by the end of the week and staying low until Thursday Oct 15, when it hit 0.0948. From there, it jumped to 0.9071 on Friday Oct 16 and then continued its rally early the next week, hitting a monthly peak of 0.9116 on Tuesday Oct 20. It slipped again to 0.9027 on Thursday Oct 22 before a final short rally to 0.9089 at the weekend. It couldn't sustain that momentum, though, and tanked all the way through the following week, hitting a monthly low of 0.8987 on Oct 31.

What's behind the Euro's poor fortunes this month? The release of Germany's October IFO Business Climate report on October 26 won't have helped, falling as it did below forecasts. The continuing rise of pandemic cases across Europe is also depressing the economic outlook, although neither the UK or the US are doing much better.

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 2020

 

Phones and Tablets

IDC found a 24.9% YoY bump in worldwide tablet shipments to 47.6m units in Q3, driven by work-from-home and consumer sales. Apple grew its shipments by 17.4% to 13.9%, taking a 29.2% market share for the top slot. Samsung, in second place with 19.8% market share, saw the biggest spike in shipments at 89.2% to reach 9.4m units. Amazon, Huawei, and Lenovo followed up with 11.4%, 10.2%, and 8.6% market share respectively.

Tablets have been doing well throughout the pandemic, but the worldwide smartphone market hasn't. The haemorrhaging slowed at least a little in Q3, said IDC, with YoY shipments falling just 1.3% to 353.6m. The company previously predicted a 9% YoY fall for this period, but said that society's reopening after the initial lockdown helped to buoy things up.

Samsung led the market in Q3 with 22.7% market share and shipments up 2.9% to 80.4m. It was followed by Huawei (14.7% market share), Xiaomi (13.1%), and Apple (11.8%). Huawei and Apple suffered YoY shipment declines of 22% and 10.6% respectively, while Xiaomi's shipments soared by 42%.

Traditional PCs

IDC said that traditional PC shipments (desktops, notebooks, and workstations) did well across EMEA in Q3, growing 11.7% YoY to reach 21m units. The growth came from the consumer side, which enjoyed a 29.3% YoY bump, compared to 2.1% YoY shrinkage on the commercial side.

Premium Ultramobile & Wearables

IDC predicted the market for smart home products to rebound after shipments fell 7.2% YoY across the EMEA region during Q2, reaching 20.3m units between April and June. We can expect sales to reach over 200m units on a 16.19% CAGR between now and 2024.

Shipments of video entertainment units fell 12.1% YoY from 2019, but still accounted for the lion's share of devices in this market at 52%. Next came smart speakers, which grew 8.9% to capture 23.6% of the market this year.

Processors, MEMs, Semiconductors

The Semiconductor Industry Association tracked an 11% QoQ increase in semiconductor sales during Q3 to $113.6bn. That represents a 5.8% YoY increase. YoY sales increased 20.1% in the US but fell 9.8% in Europe.

Memory

TIC Insights predicted a modest DRAM price erosion through the end of this year, boosted in part by the gaming console vendors rolling out their next-gen hardware for the holiday season. This follows an upward trend in DRAM prices during 1H 2020, driven by demand for some devices and new data centre servers needed to handle a spike in online service usage during the pandemic.

DDR4 RAM reached a 90% penetration rate in PCs and servers during 3Q20,said TrendForce.

Storage

Digitimes said that the new iPhone 12 series that Apple announced this autumn will consume 5-6% of the overall NAND flash memory produced in 2021.

TrendForce said that the NAND flash market joins the DRAM segment in a state of oversupply in Q4. High inventory levels make the price squeeze more pronounced for NAND than for DRAM, it said, making a QoQ drop of nearly 20% in wafer ASP likely during Q4, along with an overall 10% QoQ drop in NAND flash ASP. Enterprise SSD prices will drop 10-15% QoQ, it predicted.

Displays

Digitimes predicted a continued rally for LCD panel prices into Q4 as global demand remained robust. Strong TV, PC, and tablet sales are all fuelling this growth. Meanwhile, TrendForce expected monitor sales to grow by 5.4% YoY in 2020 thanks to the remote working trend, along with distance education.

Printers

The 3D printing market is depressed, with hardware revenues falling by 27% YoY during Q2. Nevertheless, there were some strong signs in the global 3D printing market, said CONTEXT. A 24% QoQ surge in industrial printer sales in China complemented a worldwide 68% QoQ increase in the personal desktop printer market as Chinese production came back online.

The professional price class ($2.5k-$20k) was a sweet spot, with the work-from-home trend pushing demand among customers that need this kind of thing for work. Strong Q2 demand continued into Q2, the company said, making it the only price class to see YoY revenue growth of a healthy 7% in Q2.

Network Products

 

Monthly Stats

Price increases were volatile throughout the month, with plenty of peaks and troughs. The two biggest highs came on Oct 5 and Oct 20, when they hit 35,627 and 35,529 respectively. They also saw high points on Oct 9, when they hit 27,897, Oct 15 (27,495), and Oct 26 (27,601), finally ending the month high at 27,897. Price increases also saw two big lows, on Oct 13 (1,290) and Oct 29 (2,918).

 

Prices down started the month by rising quickly to 38,152 on Oct 2 before plunging lower and then rebounding to a major spike of 54,399 - its monthly high - on Oct 6. They reached other highs on Oct 12 (30,715), Oct 14 (36,008), Oct 16 (31,485), and Oct 23 (16,912).

Stock up and down were characteristically less volatile. Stock up saw just one noticeable but small bump, in the form of an inverse V, on Oct 14, taking it to a modest monthly high of 5,885. Stock down saw a downward blipe the day before, falling to 7,861 from 14,209 a day prior. It also saw highs of 17,291 at the month's start and 17,179 on Oct 27.

New Products October 2020

Prices and Stock Movements October 2020