The IT channel is undergoing a period of volatility. Geopolitical uncertainty, supply chain challenges, component shortages and macroeconomic gloom are just the tip of the iceberg. Now more than ever, channel leaders need trustworthy data and market intelligence on which to base critical business decisions. CONTEXT has been offering such information for over four decades.

To keep clients up to speed, we run webinars every Wednesday. These give insights into weekly, monthly and quarterly trends by country, category and vendor.

Here are the highlights from the January sessions.

Q4 2023

Our 10 January webinar included an early look at Q4 2023 European sales revenue figures. In the end, revenue growth for the quarter stood at –4.3% year–on–year (YoY) with telecoms sales included and –5.4% excluding the sector. This is much better than our forecasts of –8% and –8.4% respectively. During that time, volume sales (which fell by –4% YoY) overtook value sales (down –5%).

Revenue growth for the full year was –5% YoY including telecoms and –5.5% excluding telecoms: our forecasts of 2% and 1.8% were more optimistic.

Although H1 2024 is already looking rather soft, it is heartening to note that the figures for Q4 2023 were an improvement on previous quarters and that the comparatives will be more favourable as we move through 2024.

Start of year poll

We polled those attending our 24 January webinar to get their thoughts on the coming year. Interestingly, 38% predicted flat growth for Q1 2024 and 27% said they expected revenues to fall by between –1% and –3% YoY. Most (58%) predicted growth of 1–5% for the full year. Software is the sector 63% of attendees anticipate will grow most quickly, Poland was identified by 40% of those present as the country where sales are likely to increase most, and opinions were divided about which channel will see the greatest growth with 40% choosing corporate reseller and another 40% SMR.

SMRs set for success in cybersecurity

Analyst Joe Turner shared his cybersecurity insights for the year ahead. Based on sales during the final weeks of 2023, he expects smaller resellers who offer solutions for SMBs to have a successful Q1 2024. In the cybersecurity sector, the year–end is important because many customers renew or upgrade at this time. Joe also highlighted misinformation/disinformation, training and awareness, and AI–powered threat intelligence and data analysis as key themes likely to influence this market in 2024.

LFDs end 2023 strongly

We also heard that Q4 2023 brought a nice surprise for the large format display (LFD) market –growth in unit sales (9.4% YoY) and revenues (–3.7%) both comfortably beat our forecasts. The foundations of this growth were interactive LFDs (32%), direct–view LED displays (19%) and signage (–1%). The fall in revenues was the result of declining ASPs: for example, ASPs for interactive LFDs were –18% lower than in the same quarter of 2022.

We’re predicting a more muted start to 2024 for this sector because many IT buyers postpone purchases until they’ve seen what’s on offer at January’s ISE conference in Barcelona and because supply issues related to the situation in the Red Sea will impact stock levels and sales.

UK reseller numbers fall

Finally, there was interesting data to report from CONTEXT’s reseller panel. The number of active resellers across France, Italy, Spain and the UK fell –5.4% YoY in December 2023 with the biggest fall (–7.8%) in the UK. This means the UK now has fewer resellers than Spain for the first time. It is interesting to note that the remaining resellers did not seem to benefit from this as revenue per reseller in the country remained flat.

To stay up to date with the latest IT channel market insights, register to join our next Weekly IT Industry Forum webinar here.