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CONTEXT Research Updates deliver timely insights on key market segments.

  • PCs
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PC Research update


PC sales plummet at start of 2023 but room for optimism in longer term

London, 21 February 2023 – Notebook and desktop unit sales plunged in the first four weeks of 2023, falling by −44% and −23% year-on-year respectively, on the back of low consumer confidence and muted business investment, according to CONTEXT, the global IT market intelligence company.


Displays


Consumer slump pulls desktop monitor revenue under 2021 average

London, 06 July 2022 – Worsening performance in the consumer market dragged overall European distributor desktop monitor revenues beneath the index baseline in Week 23 of 2022, according to CONTEXT, the IT market intelligence company.


Imaging


Printer sales surge in Q4 2022 due to promotions and solid business demand

London, 03 February 2023 – Sales through European distributors of printer hardware increased in Q4 2022, with both volumes and revenues exceeding expectations, according to CONTEXT, the global IT market intelligence company.


Enterprise


Enterprise networking drives solid infrastructure performance in start of 1st quarter

London, 28 February 2023 –  European distributor revenues from enterprise networking products surged by 23.4% year-on-year (YoY) in January to bolster the performance of the infrastructure category, according to CONTEXT, the global IT market intelligence company.


3D Printing


Quarterly 3D Printer Revenues Rise, Unit Shipments Slow as Worldwide Markets React to Inflation

Rising prices, divestures and currency fluctuations complicate additive manufacturing industry growth expectations

LONDON, 12 January 2023 – Aggregate 3D Printer unit shipments dropped by -4% during the third quarter of 20221, while systems revenues across the same time period rose by +14%, according to CONTEXT, the market intelligence firm.




PC sales plummet at start of 2023 but room for optimism in longer term

London, 21 February 2023 – Notebook and desktop unit sales plunged in the first four weeks of 2023, falling by −44% and −23% year-on-year respectively, on the back of low consumer confidence and muted business investment, according to CONTEXT, the global IT market intelligence company.

Revenues also fell sharply as a result of the drop in demand driven by the economic climate, geopolitical uncertainty and the cost-of-living crisis. Education deals have also dried up since last year, making comparisons unfavourable.

The amount of excess stock held by distributors across Europe has fallen from a high of 20–30 weeks’ worth six months ago to around 10 weeks now – but this is the result of promotions and heavy discounting in the second half of 2022. Alongside ageing stock, there is still a glut of low-end notebooks in some places, and the cost of inventory is rising everywhere. It is unsurprising, therefore, that distributors trying to avoid a repeat of last year’s overstock are sometimes reluctant to take on new products.

 

SMB channel hit hard

All channels are starting 2023 with revenues and sales much lower than those of the previous two years, but the biggest difference in notebook revenues is in the SMB channel as smaller sellers are more acutely affected by rising costs – not least of energy – and are having to think about cash flow more carefully during the current downturn.

The gap in revenues from notebooks is not as wide for retailers and etailers, reflecting a stronger-than-expected drop in demand in commercial sales since the end of 2022. 

Germany weak

There has been a particularly weak start to 2023 for notebook revenues in Germany where consumer confidence is low and businesses cautious. There have also been very few education sales there, whereas, in Spain, Q4 activity in this sector has spilled over into 2023 leading to a better January. We expect there to be more deals for education notebooks sales in both Spain and Italy in the first half of the year.

Cause for optimism

Revenues from Windows systems have seen a downward trend since the start of the year, but those from Apple systems have recently rallied off the back of new products: some 16,000 M2 Pro-based MacBook Pros were sold at an average of around €2000 per SKU in January. Chrome revenues are down in line with demand from the education sector, and we expect this gap to continue throughout the year.

The drop in PC sales is to be expected given that the economic downturn is worse than was anticipated a year ago. The volatile geopolitical situation is causing businesses to pause investment while consumers continue to suffer from inflation and high energy prices. However, there’s still room for optimism: we can expect product refreshes and pent-up demand to pick the market up by the end of the year, and in particular in the course of 2024.

 

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Consumer slump pulls desktop monitor revenue under 2021 average

London, 06 July 2022 – Worsening performance in the consumer market dragged overall European distributor desktop monitor revenues beneath the index baseline in Week 23 of 2022, according to CONTEXT, the IT market intelligence company.

CONTEXT’s Revenue Trend Index (RTI) plots performance against a 100 baseline representing the average weekly revenue in 2021. In Week 23, the RTI for monitor revenues overall was just under the baseline but that for consumer sales was more than −80 points below it. However, the business market continued to perform well, standing at just under 120 on the index. The backstory is one of continuing business demand, as offices reopen and are refurbished following the pandemic, while inflation and cost-of-living challenges depress the consumer market. 

As the summer continues, consumers are likely to spend less money on technology hardware and more on holidays and other experiences. A rebound in the desktop monitor market is, therefore, unlikely to happen before the autumn – if there is one at all. 

Countries and channels

The breakdown by sales channel tells a similar story. Corporate resellers are performing better than other distributors, with an RTI of around 120 for Week 23, thanks to demand for kit to upgrade offices. Small and medium resellers are also above the baseline; retail chains and business etailers are slightly under but consumer-focused etailers are stuck on −80. 

France was leading the charge earlier in 2022 but, as of around Week 21, revenues had converged with those in most other countries and were just under the baseline in the range 0 to −90. Italy is something of an outlier, currently tracking at under −80. CONTEXT research shows that it is due to a sharp decline in consumer demand as cost-of-living increases bite hard.

All eyes on docking monitors

The same market dynamics can be seen in the breakdown of revenue performance by monitor purpose. Gaming (−80) and graphics (−50) monitors have sat under the baseline for most of the year, while docking monitors are soaring above it with the RTI standing at over 200 in Week 23. These  monitors feature USB charging and ethernet capabilities making them ideal for hot-desking environments. As firms begin to embrace hybrid working, strong business demand is ensuring that most of the innovation in the market is currently happening in this niche and helping to push up Average Selling Prices (ASPs). Companies with workers splitting their time between home and the office are prepared to spend on more feature-rich models that focus on ease-of-use and connectivity, as they need to invest in fewer units.

Despite rising inflation, ASPs in the consumer space have fallen from a high of €184–5 at the start of 2022 to €180 in May. Meanwhile, ASPs for business desktop monitors rose from €204 in January to €215 in April, before falling back to €205 a month later. Rising ASPs reflect the demand for docking and feature-complete monitors, as do lower unit sales. These trends are broadly expected to continue over the course of the summer.




Printer sales surge in Q4 2022 due to promotions and solid business demand

London, 03 February 2023 – Sales through European distributors of printer hardware increased in Q4 2022, with both volumes and revenues exceeding expectations, according to CONTEXT, the global IT market intelligence company.

CONTEXT data revealed a 12.3% year-on-year (YoY) increase in unit sales and a 27.8% increase in revenue during the period thanks, in part, to aggressive promotions designed to clear entry-level stock and strong business demand for higher-end devices. These factors helped the market perform significantly better than CONTEXT’s most optimistic scenario for the quarter.

 

Revenue on the rise

Poor market performance in 2021 means the comparatives are favourable, but the product mix has changed over the last year. In Q4 2022 there was more emphasis on high-end consumer printers and mid- and high-end business devices – particularly expensive multi-function laser printers – than in 2021. Alongside price increases for mid- and high-end consumer and commercial products, these factors are largely responsible for the growth in revenues, which has been strong since Week 38. There has been something of a slowdown since Week 52, although both markets are still some way above the revenue trend index baseline.

Small and medium resellers had a strong end to 2022, and this continued into the first week of 2023, driven by business sales across public and private sectors as well as the price rises. We have seen a steady growth in the e-tailer channel since Week 40, highlighting the resurgence of consumer spend. Distributors have also worked hard, using promotions to shift entry-level stock.

 

Consumables in decline

By contrast, the consumables market declined significantly in Q4: down 18.2 YoY % in unit sales and 11.4% in revenues. That is far worse than CONTEXT’s pessimistic outlook of falls of 9.8% and 6.7%, respectively. A decrease in sales of the ink cartridges that make up over 80% of consumable sales in the region was the main reason but toner sales also fell sharply. Refillable ink bottles are gaining market share and interest in these can only increase throughout 2023 and beyond as they are more economical for consumers and will therefore appeal at a time of higher living costs. Subscription models are becoming more prominent, and since their primary route to market is direct, their value is not captured in distribution channel data.

The average number of pages printed also fell sharply in December (by 12% YoY) despite the return to the office. With paperless policies proliferating in the public and private sectors, this fall is likely to continue

 

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Enterprise networking drives solid infrastructure performance in start of 1st quarter

London, 28 February 2023 –  European distributor revenues from enterprise networking products surged by 23.4% year-on-year (YoY) in January to bolster the performance of the infrastructure category, according to CONTEXT, the global IT market intelligence company.

Renewed component availability and solid demand have been the main drivers of the category, which has seen revenues grow significantly over the last two quarters.

In January 2023, both switching and wireless products performed strongly (with growth of 20.3% and 38.2%, respectively) and the gap between the two sectors continued to diminish as wireless sales begin to slow after an impressive two or three years.

Overall unit sales of switching and wireless appliances grew by 4% YoY: while those of entry-level products declined by 6.9% over the month, mid- and high-end hardware sales increased by 20%. It is, therefore, the latter that drove the revenue surge. More expensive products benefited from supply chain improvements, as they did in Q4 2022.

Servers lag

The enterprise server market could not match this performance. January revenues declined slightly (by 0.2% YoY) and overall unit sales plummeted by 25.8%. Two-socket server sales were down by 22%, one-socket sales by 32%, and four-socket server sales by 40%. Although the fulfilment of outstanding orders, which has been the main driver of growth since the middle of summer 2022, subsided in January, there are persistently high levels of backlog to clear and we are confident this will have a positive impact as Q1 continues.

Storage revenues in Week 5 were slightly above 2021 and 2022 figures after a small drop (of 1.6%) in January. Although the Hyperconverged (HCI) storage segment was the main driver of growth in Q4 2022, its revenues fell by more than 20% YoY in the first month of this year while the more traditional array segment grew by 4%. Falling prices in the solid-state drives (SSD) segment, especially Non-Volatile Memory Express (NVMe) interface products, have also had an impact on storage revenues.

Country by country

Economic uncertainty, the Ukraine–Russia war, and rising energy costs have taken their toll on German business confidence, so solid infrastructure performance there in Week 5 is welcome news. The country saw significant growth in storage (30%) in January, and the server segment performed better than that of any other Top-5 European economy, decreasing by only 3% YoY. With more certainty over energy prices, thanks to a milder than expected winter, and declining inflation, investments should be resuming soon, and Germany could well lead the recovery of this market in the first half of 2023.

At the other end of the spectrum, UK results for January were weak in spite of good performance in Q3 and Q4. In fact, the country is the only one in the European Top 5 where enterprise networking revenue declined (by 4%), and it recorded a 50% YoY drop in storage revenue.

In Italy, overall infrastructure revenues grew, and the 46% growth in networking revenues was the best in the Top 5. However, the country’s server segment performed poorly with revenues falling 25% YoY in January.

 

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Quarterly 3D Printer Revenues Rise, Unit Shipments Slow as Worldwide Markets React to Inflation

full content in research-updates/3d_printing page

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