Research Updates

London, 18 February 2019 – Trends that characterized Western European PC distribution during 2018 are continuing in the first weeks of 2019, with good demand from commercial buyers offset by weaker consumer sales, according to the latest distribution data published by CONTEXT, the IT market intelligence company.   

Volume sales of commercial PCs were up by +5% year-on-year in January following year-on-year growth in each quarter of 2018. Although desktop sales were down by a small -1%, there was positive performance across most commercial categories: desktop workstations increased by +3%, notebook volumes were up by +8 % and notebook workstations were up by +16%. As in 2018, ultra-slim notebooks, characteried by a z-height of less than 18 mm, were strong growth drivers in the portable segment with sales rising by +50%, to give these models a 22% share of the  commercial notebook market.

On the other hand, sales of consumer PCs were weak with volumes falling by another -5% in January this year following quarterly year-on-year declines throughout 2018. Although the growth in some segments – including ultra-slim notebooks and Chromebooks – that was seen in 2018 continued, it was not strong enough to reverse the overall negative trend.

It is expected that commercial sales will remain the stronger in 2019 as Windows 10 refreshes continue and companies focus on improving security and implementing modern workplace solutions. However, while demand should stay healthy, the current Intel processor supply constraints are expected to have an impact on sell-through during the first half of 2019, although the extent of this will vary by country and vendor.

London, 05 December 2018 – Volume sales of tablets through the distribution channel in Western Europe were up by +21% year-on-year in October 2018 following a return to growth earlier in the year, according to the latest distribution data published by CONTEXT, the IT market intelligence company.

Much of the early Q4 growth was driven by Huawei. The vendor continued to increase its footprint across distribution and posted +221% year-on-year growth in October, securing a 20.5% volume share and overtaking Samsung to become the second-largest tablet seller in the distribution channel – even though Samsung also saw strong growth of +23%. Apple retained its strong No. 1 position but lost share on the back of a +4% increase in volumes.

Most tablet sales (nearly 60%) were into retail and consumer etail, and volumes were up by more than +20% year-on-year as the channel prepared for Black Friday and the pre-Christmas season. Volume sales to business channels also increased, albeit from a smaller base.  

Tablet sales through Western European distributors picked up in Q2 2018 following a long period of decline. More recent growth has mostly been driven by the top three vendors, as many top-tier PC manufacturers and smaller vendors have left the segment or reduced their focus on tablet innovation and marketing.

                                        Tablet sales by vendor, WE distribution

London, 27 March 2019 - Worldwide shipments of desktop monitors reached almost 31.1 million units but registered a -5 % year-on-year decline in Q4 2018 despite growth in Europe and North America, according to the latest figures from CONTEXT, the IT market analysis company.

The decline was greatest in the consumer segment which dropped by -6% while the fall in commercial sales was -4%. Shipments to Europe, Middle East and Africa grew by +2% overall with year-on-year increases of +7% in Central and East Europe and +5% in West Europe. Shipments to North America also increased, by +7% year-on-year, but those to the rest of the world – 45% of the total – declined, with sales to China, decreasing by -12% year-on-year. Multi-function monitors also saw a weak quarter with worldwide shipments declining by -40% year-on-year.  

                       Desktop monitors - global shipment by target customer

Despite this, there are still growth opportunities due to factors such as a shift to larger, more expensive screens; rising sales of higher resolution displays; and growing demand for ultra-wide monitors which attract not only gamers but also professionals seeking a more comfortable and efficient workspace.

Full-HD monitors have steadily penetrated the global market and now account for two thirds of all shipments. However, in the last quarter of 2018 shipments of such monitors declined – although this was offset in the consumer segment by the growing popularity of WQHD and UW-QHD screens, shipments of which increased by +34% and +30% respectively. Consumers are continuing to adopt high-resolution 4K/UHD monitors and worldwide sales grew by over +47% – more than those for any other resolution. Meanwhile, in the business space, demand for ultra-wide monitors overtook that for 4K/UHD monitors with shipments doubling in Q4 2018. 

Corporate buyers, in particular, need to consider more than the display quality and real estate; connectivity is another important factor when evaluating monitors for modern and efficient workspaces because integrated connections help create an almost cable-free desk. Hence, an increasing number of monitors have multiple ports of various types. In Q4 2018, worldwide shipments of monitors with USB-C grew by over 160% year-on-year but still accounted for only 3% of the total volume. The number of monitors with DisplayPort and HDMI connections has also grown significantly in Q4 2018 (by +13% and +5% respectively), confirming the more demanding requirements of buyers.

Dell retained its position as top vendor with an 18.7% unit share of the total market in Q4 2018; HP and Lenovo followed with shares of 14.3% and 11.6% respectively. 

                 Desktop monitors - global shipment share by connection types

London, 06 March 2019 - Unit sales of business-targeted monitors in January 2019 by Western Europe’s IT distributors grew by +19% year-on-year as increased specifications and lower average selling prices (ASP) boosted demand, according to the latest data published by CONTEXT, the IT market intelligence company. Consumer-targeted monitor unit sales grew +9% over the same period.

For most vendors, 2018 was a very successful year in terms of desktop monitor sales. As 2019 begins, distributors are seeing consistent growth in demand and, despite the focus on high-spec consumer and gaming monitors, business models continue to generate more revenue (61% in January 2019) as their declining average selling price (ASP) boosts demand.

In the first month of this year there were notable increases in sales to small and medium businesses and the business etail channel, both of which grew by over 25% year-on-year driven by sales of cheaper (€100–€150) 24" models. After a weak December, sales to corporate resellers also increased in January – but only by +8%, increasing revenues +10% year-on-year. In this segment also, sales are driven by low-end monitors costing less than €150: for instance, Philips saw growth of over 120% in year-on-year sales of its cheaper 23" models.

As the year progresses, revenues from desktop monitors are expected to continue to benefit from the PC refreshes that are accompanying the ongoing transition to Windows 10. The growing need for efficient use of space will also accelerate monitor sales, particularly the adoption of models with USB type C: in January 2019, such business-targeted monitors were responsible for almost 14% of revenues in WE distribution, and their sales increased by over +300% year-on-year in January, with corporate resellers driving this growth. Revenues are also likely to grow as vendors continue to compete by offering businesses more affordable models while looking for their own high-margin niche – be that curved or touchscreen monitors, or those aimed at supporting graphics or medical applications. 

       Business-targeted monitors: Revenue % share by USB port type, WE distribution

London, 25 February 2019 - Sales of printer hardware through distributors in Western Europe (WE) were flat at -0.1% year-on-year in Q4 2018, mainly driven by the negative performance registered in December, which was a short month due to the Christmas holidays, according to the latest distribution data published by CONTEXT, the IT market intelligence company.

Laser devices reversed the trend seen earlier in the year by outperforming inkjet devices, and sales of consumer-targeted devices increased by +8.5%. Consumer printers steadily increased their market share and drove overall imaging growth in 2018.

Sales of multifunction printers (MFPs) were up by +2.2% year-on-year with continued growth for both laser and inkjet MFPs (sales were up by +4.1% and +1.7%, respectively). However, this was offset by the negative performance of single-function printers (SFPs) of which sales were down by -10.1% (-20.6% for inkjet SFPs and -7.2% for laser SFPs). This pattern confirms that the shift from single- to multifunction devices is continuing and is likely to be further consolidated going forward, particularly for lower spec models for which there is not a high demand from resellers, according to an UK Distributor (which has also informed that they are frequently asked if they can secure high volume, low spec, low price for export).

Sales of inkjet MFPs were better than during the same period in 2017. Monochrome and A3 MFPs were still driving inkjet growth with sales +42.2% and +13.8% higher than the previous year. Entry-level ranges (priced up to €400) continued to lead sales of consumer-targeted MFPs, accounting for 99.8% of units and generating €91 million. Sales in the higher price bands of this range also grew significantly, up by +38.8% for printers costing €150–200, +68.1% for those costing €200–300 and +40.7% for devices priced at €300–400. Sales of mid-level printers saw a double-digit increase in the €500–600 price band, which grew by +49.7% year-on-year.

Laser MFP volume sales were up by +4.1% in Q4 2018 driven by the exceptional performance of consumer-targeted devices (sales up by +111.6%), primarily because the ASP is continuing to decrease. The business-targeted models, which account for 72.1% of laser MFP sales and 89.4% of revenue, registered a sales drop of -13.2%, mainly because the ASP is continuing to increase, and which suggests businesses are replacing entry-level business-targeted models with mid and high-level consumer-targeted devices.

2018 saw the print industry continue to face the stark realities of digital disruption, however, sales of multifunction printers (MFPs) were up by +1.2% year-on-year in 2018 with continued growth for both laser and inkjet MFPs in 2018 (sales were up by +3% and +0.9%, respectively), which does not show a noticeable shift in sales towards the Managed Print Services (MPS). Nevertheless, according to the distribution channel, more and more resellers are looking at complimenting their offering by having an MPS proposition (partnering with vendors directly or indirectly, or through MPS dealers to support their business). However, vendors still need to expand their security assessment and monitoring services, along with partnering with traditional IT security providers, particularly in the area of threat intelligence to ensure that print security is treated with the same priority as the rest of the IT infrastructure. Print and digital convergence will drive increased demand for integrated document workflow in 2019, and despite the rapid adoption of digital and mobile technologies, many businesses remain reliant on print to some extent.

           Graph 1: Imaging unit sales and Y/Y change by category – WE distribution

Imaging sales and revenues grew in a few WE countries in Q4 2018, particularly in the United Kingdom which registered a double-digit increase in sales spread across nearly all categories (inkjet SFPs were the exception) and driven by the vendors which account for 83.2% of the British market: HP (sales up +68.3% year-on-year), Kyocera (+44.8%), Brother (+35.3%), Xerox (+24.6%), Lexmark (+18.6%) and Canon (+14.8%). Italy was one of the only other countries that saw growth in nearly every category (inkjet SFPs were again the exception) and there were strong performances from Samsung which changed its go to market strategy from resellers to distributors (sales up +109% year-on-year), Canon (+9.6%), Xerox (+7.7%) and HP (+7.4%), which share over 68.3% of the country’s printer market. 

But it was Belgium that registered the highest growth over this period – in terms of both units sold (up +32.7% year-on-year) and revenue (+29.1%) – with the increase driven by the three companies that dominate the country’s printer market and together hold a share of over 74%: Epson (sales up +140.6%), Samsung (+107.4%) and HP (+10.6%).

Norway saw revenue increase by +11.9% even though volumes were down by -11.5% year-on-year. This can be attributed to the increased number of sales in the mid- and high-level ranges (€800–900, €900–1000, €1200–1300, €1900–2100 and €2600–3100 price bands), which registered a three-digit increase overall (+115.9%).

Graph 2:  Y/Y change in imaging units sold through distributors by country – Top 5 WE countries 

Table 1:  Y/Y change in imaging units sold and revenue (Q4 2018) – WE distribution 

London, 14 December 2018 - Sales of printer hardware through distributors in Western Europe (WE) during October 2018 (early Q4) were up by +8.4% year-on-year, reversing the trend for the year so far, according to the latest distribution data published by CONTEXT, the IT market intelligence company.

Inkjet devices continued to outperform laser devices and sales of consumer-targeted inkjets increased. In fact, sales of consumer printers in October 2018 continued to drive overall imaging growth, although a double-digit decline in sales of business-targeted models, which were down by -12%, helped.

Sales of multifunction printers (MFPs) were up by +12.8% year-on-year in early Q4 2018 with both inkjet and laser MFPs continuing to see good growth (sales were up by +14.3% and +6.7%, respectively). However, this growth was offset by the negative performance of single-function printers (SFPs): sales were down by -10.5% year-on-year overall and -30.3% for inkjet SFPs. This pattern confirms that the shift from single- to multifunction devices continues.

Sales of inkjet MFPs were better in early Q4 2018 than in the same period of 2017. Monochrome and A3 MFPs were still driving growth with sales increasing by +98.2% and +18.2% compared to October last year. Entry-level ranges (priced up to €400) continued to lead sales of consumer-targeted MFPs, accounting for 99.9% of units and generating €44.8 million. There were also significant increases in growth in the higher price bands at this level:  +77.8% for €150–200 printers, +98.8% for those costing €200–300 and +91% for devices priced at €300–400. However, the greatest increase was in the €500–600 price band, which grew by 106.2% year-on-year.

Laser MFP volume sales were almost the same in October 2018 as in October 2017. The exceptional performance of consumer-targeted devices (sales up by +187.7%) was offset by a drop of -17% for the business-targeted models that account for 68.9% of laser MFP sales – 87.2% in terms of revenue.

During October 2018, in contrast to Q3, imaging sales and revenues grew in several WE countries, particularly Italy and the UK where double-digit increases in sales led to increases in revenue. Italy was also one of the only countries where there was growth in nearly every category (inkjet SFPs were the exception) driven by the strong performance of Samsung (up +144.1% year-on-year), Canon (+38.1%) and HP (+29.5%), which share over 74.6% of the country’s printer market. The increase in the United Kingdom was driven by the vendors which account for 82.9% of the British market: HP (+75.5%), Canon (+30.8%) and Brother (+28.2%). But it was Belgium that registered the highest growth in October 2018 – in terms of both units sold (up +56.9% year-on-year) and revenue (+48.5%) – with the increase again driven by the three companies that dominate the country’s printer market: Epson (sales up +234.9% year-on-year), Canon (+51.9%) and HP (+34.8%) together hold a share of over 91.9%.

                    Imaging unit sales and Y/Y change by category – WE distribution

               Figure:1 Y/Y change in imaging units sold through distributors by country -

                                                           Top 5 WE countries

                Figure 2: Y/Y change in imaging units sold and revenue - WE distribution

London, 21 February 2019 – Combined revenues from server computing products sold to enterprise customers through the distribution channel in Western Europe (WE) increased by +10.4% year-on-year in 2018, according to the latest distribution data published by CONTEXT, the IT market intelligence company. The product segments grouped in this meta-category are preconfigured server systems, random access memory (RAM), processors, hard-disk drives (HDDs) and solid-state disks (SSDs). The growth was driven by a number of trends, among them the ongoing adoption of SSD upgrades and an increase in sales of RAM upgrades

                                 Server Computing Revenues: WE Distribution

               Year-on-Year Growth in Server Computing Revenues: WE Distribution

The combined server computing categories saw year-on-year revenue growth in every month of 2018 except December, which was a short month due to the Christmas holidays. The drivers of this growth, however, changed throughout the year. 

What was surprising was the resurgence of preconfigured server systems, from which revenues were up by +10.7% in 2018. While this was not consistent over the year, there was strong growth in several months including a year-on-year increase of +47.3% in September. Although the increased revenues were largely the result of server refreshes, there was no corresponding growth in unit sales and these declined steadily even as the value of server configurations increased due to the use of higher-value SSD and RAM components. 

Year-on-year revenue growth from RAM upgrades declined as the year went on, but only became negative in December resulting in an increase of +14.3% for 2018 as a whole. Supply constraints throughout the year meant that average selling prices (ASPs) remained high. 

Revenues from HDD upgrades were down by -6.4% year-on-year. The ongoing decline was expected – and is set to continue – as SSD upgrades are chosen over HDDs. This switch drove revenues for SSD upgrades up by +22.0% in 2018. However the revenue growth was not consistent, with falls in a few months in the middle of the year, because SSDs were also affected by supply issues which had an impact on ASPs. That said, the revenue shares of these two storage options are closing in on each other and we should expect a cross-over soon.

The server refresh mentioned above also helped drive revenues from server processor upgrades, as did the transition to Intel Xeon scalable processors. An additional factor, especially important from September 2018 onwards, was Intel’s warning of upcoming shortages, which encouraged customers to take precautions.

  Monthly Revenue Share for Server Computing Categories Through WE Distribution

When looking at the revenue share over time, it becomes clear that over the past two years, RAM has played a more important role within server computing. This was helped along with the increase of average ASPs due to supply constraints. Similarly, we can see that the revenue share of SSDs have certainly increased compared to the slow but steady decline of HDD revenues. 

One thing that looks almost consistent, though, is the revenue share by preconfigured server systems. As we have seen a continuous decline in units, it confirms the increase of achieved ASPs we have been seeing throughout this time.

London, 17 December 2018 – Revenues from local area network (LAN) switches sold to enterprise customers through the distribution channel in Western Europe (WE) were up by +17.3% in November 2018 compared to the previous year according to the latest distribution data published by CONTEXT, the IT market intelligence company.

This growth was largely driven by the sales of campus LAN switches, which have grown by +30.7% year-on-year (Y/Y) in November 2018, increasing the product segment’s revenue share to almost 60% and consolidating its lead in this group. Across WE, there were growing sales of a number of product families, including Cisco’s Catalyst, Hewlett Packard Enterprise’s Aruba, Extreme Networks’ Summit, Huawei’s S5700 and Juniper Networks’ EX, to name but a few. The speeds of switches sold are slowly but continually moving away from the 100 Megabits per second (Mbps) Ethernet standard and 1,000 Mbps switches accounted for more than 92% of revenues in this segment during November 2018. There was also double-digit growth in revenues from 10,000 Mbps products, and increasing adoption of switches with speeds of 2,500 Mbps, 25,000 Mbps, 40,000 Mbps and 100,000 Mbps.

                                  Enterprise LAN revenue share: WE distribution

Revenues from SMB LAN switches were down by -1.1% in November, despite growing demand for products from Cisco, Lancom Systems and Extreme Networks. Revenues from products featuring 1,000 Mbps were stagnant, but those from switches with speeds of 10,000 Mbps and 2,500 Mbps grew.

                           Enterprise LAN Y/Y growth Nov-2018: WE distribution

Revenues from data centre switches declined by -6.9% Y/Y, with the top five vendors all seeing revenue falls. Other vendors, such as Brocade, Huawei and Alcatel-Lucent, saw good growth although this was, of course, from a smaller base in the previous year. In this segment, the only class of products that saw significant revenue growth was 25,000 Mbps switches.

London, 19 July 2018 – Shipments of Personal/Desktop 3D printers saw their first ever year-on-year drop in Q1 2018 with 3% fewer printers shipping globally than in Q1 2017. Conversely, the Industrial/Professional segment saw its third consecutive quarter of year-on-year growth with printer shipments up +14%. While low-priced Personal/Desktop 3D printers are of interest to many, the Industrial/Professional segment - which accounts for 81%+ of all global printer revenues - is the one most closely monitored and the one with the strongest links to overall market health.

  Chart 1: Global 3D-printer unit shipments and growth by legacy application category

When grouped by class and segmented strictly by selling price, the biggest weakness can be seen in the Professional 3D printer class, shipments of which were down -21% year-on-year after 112% growth in 2017.

In recent years, many 3D-printing stalwarts have largely abandoned this Professional class, but it gained traction in 2017. This is due to start-ups, who had previously focused mostly on Personal 3D printing for consumers, hobbyists and education, beginning to recognize the growing demand in this more price-inelastic segment.

The Personal class of 3D printers, in which shipments were mostly flat year–on-year, is a bit more of a concern for the industry. Sub-$2,500 printers have seen great growth in recent years and sell well in education, hobbyist and even professional markets – unfettered growth in the sales of these low-priced printers has continued in spite of the lack of a true “consumer” market base. In recent years, crowdsourcing platforms (e.g. Kickstarter, Indiegogo, etc.) have been a barometer for demand but, over the last few quarters, they have offered few innovations in Personal 3D-printer products results in fewer-and-fewer successful campaigns.

                         Chart 2: Global 3D-printer unit shipments and growth by class

While the unit volumes associated with the Personal (and even Professional and Design) class of printers continue to catch the interest of many casual observers, the market is still very much driven by the Industrial class which accounted for 69% of global printer revenues in Q1 2018.

Printers in this class are most poised for market disruption in that they are able to move the market from its prototyping roots to one also focused on serial production, and shipments were up a healthy +20% year-on-year. This class is largely segmented into polymers/plastics printers and metals printers. Market leaders in Industrial polymer 3D printer shipments in Q1’18 included Stratasys, Union Tech, HP, Carbon and 3D Systems with impressive growth seen from HP, Carbon and 3D Systems. Leaders in unit shipments for metals 3D printers for the period included EOS, GE Additive, SLM Solutions, 3D Systems and Renishaw.

* 3D-printer segment by ASP: INDUSTRIAL = >$100K, DESIGN = $20K–$100K, PROFESSIONAL = $2.5K–$20K, PERSONAL = < $2.5K

Total 3D-printer market up +14% year-on-year with INDUSTRIAL printer shipments up +39% thanks to increased shipments of metals machines and new polymer machines

LONDON, 24 April 2018 – The global 3D-printer market continued its upward trajectory in Q4 2017 with more than 132K units shipped over the quarter, 14% more than in the same period a year ago. Shipments of INDUSTRIAL* 3D printers were up by 39% mostly thanks to newcomers in the polymer segment, including HP and Carbon. However, the continued strength of shipments of metals 3D printers, from new players and industry heavyweights such as GE Additive, EOS and SLM Solutions alike, also contributed.

While the redefined PERSONAL* segment began to show some signs of weakness, with only 10% more printers shipped than a year ago, the newly segmented PROFESSIONAL* class made great gains and shipments were up +97% on 2016. Even the struggling DESIGN* segment – the one most associated with prototyping and dominated by industry stalwarts Stratasys, 3D Systems and EnvisionTEC – saw year-on-year gains of +13%, demonstrating the upward momentum of the entire industry.

                Chart 1: Global 3D-printer unit shipments and growth by major segment

While unit volumes are dominated by sub-$2,500 PERSONAL printers, 70%+ of global printer revenues come by way of the INDUSTRIAL printer segment so, in assessing the overall health of the industry, this is the segment most closely watched. It is also the one leading the push of additive manufacturing into the $12T mainstream manufacturing market. Printer revenues in this important INDUSTRIAL segment were up +44% on a year ago. The INDUSTRIAL segment saw good growth both in polymer 3D-printer shipments – up +31% year-on-year – and metals 3D-printer shipments which were up a phenomenal +62% for the quarter.

    Chart 2: INDUSTRIAL* 3D-printer unit shipments and growth by major material type

* 3D-printer segment by ASP: INDUSTRIAL = >$100K, DESIGN = $20K–$100K, PROFESSIONAL = $2.5K–$20K, PERSONAL = < $2.5K