October 2020

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

 

Executive Summary

  • Tablet sales are healthy
  • Gaming monitor shipments soar
  • Expect a downturn in DRAM pricing

51,065

The largest number of price increases happened on September 14th, with 51,065.

Jump to Monthly Stats

COVID-19 continues to depress some parts of the economy but from a financial perspective at least it has some silver linings. Sales in products that support work and play at home are on the rise, giving the channel at least some respite during an otherwise difficult year.

However, fortunes continue to drop in the smartphone market. No one can deny the general downturn in sales, which has been apocalyptic from a channel perspective. Counterpoint Research saw a global rise in the average selling price of phones during Q2, but numbers from IDC suggested this won't last for the entire year.

 

Exchange Rate

The euro slipped consistently against the dollar through the first three weeks of September. From a high of 1.1955, it fell quickly to 1.1830 on Sept 3. It ranged between 1.1788 and 1.1868 for the next two weeks until Sept 21, when it began a one-week drop to hit 1.1628 on Sept 26. Then, it rallied slightly to finish the month at 1.1724.

The European currency's fortunes against the pound were almost the exact opposite. It began the month at 0.8914 before dropping to a low of 0.8888 the following day. It spent the rest of the week on a plateau before rising sharply from 0.8915 on Sept 7 to 0.9246 on Sept 11. It arced through a high of 0.9255 on Sept 12 before falling to 0.9120 on Sept 17, and again through 0.9183 on Sept 22, falling to 0.9083 on Sept 29. It ended the month with a slight uptick at 0.9108.

Europe saw a marked rise in COVID-19 cases during September, reaching record highs at the Euro's zenith against the dollar. The realisation of the situation's severity in Europe, along with ongoing concerns over the Euro's high valuation, broke the spell. Comments from Chicago Fed president Charles Evans signalling an interest rate hike might have helped depress the Euro, even though he walked them back a day later.

There was one clear thing behind the euro's good fortunes against the pound: Brexit. Trade talks between the UK government and the EU broke down acrimoniously, dampening the effect of a healthy 6.6% growth in the UK economy during July. Businesses hate uncertainty, and the frozen relationship between the UK and Europe has left businesses feeling grim.

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

Counterpoint Research found that a quarter of people in the UK would spend at least $600 on their next smartphone. It also noted a 10% increase in average selling price in Q2 2020 even as shipments fell 23% and revenues fell 14% YoY. The premium market is resilient, the company said, declining at just 8% YoY during the quarter. The uptick in 5G handset sales has helped buoy up this market segment, it added. However, this rise in whole ASP wasn't equally distributed; European ASP rose just 1% to $291 in Europe, putting it behind the rest of the world, other than Latin America, which saw a 5% drop.

Those figures focus on Q2, but the overall ASP increase might not last out the year. Economic uncertainty is driving down smartphone prices, warned IDC. This year, 73% of shipments will be priced below $400, the company said.

Nevertheless, the pandemic drove some market successes. The EMEA tablet market grew 23.8% YoY to 11.9m units in Q2, which was the strongest growth since 2013. Consumer sales fuelled those numbers with 27.1% growth, due to the drive for entertainment and education devices in the lock down period. Samsung led the market with a 28.3% market share in shipment terms and a 69.3% growth. (only Lenovo's shipments grew more YoY at 74.1%). Apple was second in market share at 21.5%, followed by Huawei in distant third place at 15%.

Traditional PCs

Global shipments of gaming PCs and monitors will rise 16.2% YoY to 49.6m units in 2020, according to IDC. New GPUs from Nvidia, AMD, and Intel will help a market already fuelled by COVID-19 as home-bound consumers look for entertainment. EMEA enjoyed a 33% YoY spike in gaming desktop and notebook sales in Q2, the company added, with a 29.6% growth in Western Europe, primarily in notebooks, which grew 40.7%. The company predicted another 26.3% YoY growth across EMEA as a whole in Q3 and a 10.% growth in Q4.

Premium Ultramobile & Wearables

Smart home device sales will grow 4.1% YoY to over 854m units, said IDC. Home monitoring and security was the biggest single performer, growing 16.2%. That's a little strange, given that everyone is working from home. The rise in wearables makes more sense; The analyst company predicted a 14.5% YoY growth in these systems to 396m units from 345.9m last year. Watches (14.3% and hearables 14.1%) led the charge, with wrist bands growing 2.4%.

VR headset sales will suffer a short-term 6.7% YoY decline in 2020 thanks to supply chain disruptions, said IDC, but that will revert to a 46.2% double-digit growth next year, it predicted. After all, who doesn't want an alternative reality in 2020? The industry's good fortune will continue through 2024 with a healthy 48% CAGR.

Processors, MEMs, Semiconductors

Global semiconductor sales rose 4.9% YoY in August to $3.62bn according to the Semiconductor Industry Association. Europe saw none of that action, instead suffering a 10.1% drop in revenues. Things were better month-on-month for the European market, which saw a 5.5% increase in sales.

Memory

TrendForce saw Q3 original device manufacturer (ODM) orders tank in Q3 thanks to high inventories. It'll take up to two quarters to flush the supply chain, the company predicted, which will slow down DRAM procurement. Expect a QoQ drop of 13-18% in server DRAM pricing during Q4, it warned.

Storage

The market for purpose-built backup appliances (PBBAs) rose 11.1% YoY to $320.9m in the EMEA region, IDC said. Open systems (as opposed to mainframe-based ones) in Western Europe accounted for most of it, enjoying a 27.3% YoY spike in revenue to reach $129.44m. The external storage market in Western Europe didn't fare nearly as well. It fell 12.4% in dollar terms YoY in Q2, the analyst company said. All-flash array revenues jumped 4% to account for 43.6% of total value.

Displays

Monitors performed especially well in IDC's report about a spike in gaming equipment sales. Expect a YoY growth of around 55% in global sales during 2020 to reach 12.4m, it predicted. CONTEXT confirmed the spike in gaming monitor sales and noted that the UK saw a 163% YoY growth in unit shipments during July. Ireland's shipments grew 224% in the same period.

Printers

CONTEXT saw sales of single-function inkjet printers surge in Western Europe during the pandemic during Q1 before falling back in Q2. Q1 saw a 45.6% YoY rise in March, but distributors sold over ten thousand fewer units in May 2020 than May 2019. The company believes that increased demand in the early days of the lock down led to a supply chain squeeze. Pricing might also have been a factor, it said, as the average selling price of these units fell from January to April before rising in May and June. When they fell once more in July, sales increased 9.4% YoY. Consumer models fuelled most of the growth, with a 14.6% YoY growth in Q1 and a 4.9% growth in Q2.

Network Products

IDC recorded a 6.3% YoY fall in Ethernet switch revenues to $6.6bn during Q2, while enterprise and service provider router revenues were flat with a 0.1% increase to almost $4bn. Western Europe did particularly poorly, shedding 13.1% of its revenue from switches and 10.4% of its router market value.

 

Monthly Stats

Price increases started at a low of 1,734 on Sept 2 before seeing four big spikes throughout the month. On Sept 8 they hit 35,163, and spiked again to a monthly high of 51,065 on Sept 14. On Sept 21, they rose to 39,872 and then hit their final peak of 45,593 on Sept 29 after a drop to 8,607 on Sept 28.

Price decreases saw five peaks during September, beginning with an early one of 37,810 on Sept 3 before falling to a monthly low of 4,581 on Sept 7. On Sept 8 they spiked again to 31,563, and then saw their third distinct peak to 30,795 on Sept 16. Sept 23 saw a more modest rise to 24,349, and they had their last hurrah on Sept 28, rising to 33,586. HP logged the largest number of price increases and decreases in September.

Stock increases and decreases were characteristically subdued in number compared to fluctuations in pricing. Increases saw modest peaks on September 3 (6,397) and Sept 18 (5,973). Stock decreases spiked on Sept 15 at 15,739 and Sept 29, when they reached 15,549.

New Products September 2020

Prices and Stock Movements September 2020