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CONTEXT Research Updates deliver timely insights on key market segments.

  • PCs
  • Displays
  • Imaging
  • Enterprise
  • 3D Printing

PC Research update


Notebook sales in Western Europe maintain momentum while desktop demand dives

London, 26 May 2020 – In April, volume sales of notebooks through Western Europe’s largest distributors maintained their momentum and increased by +46% year-on-year while sales of desktops dropped by -32%, according to the latest data published by CONTEXT, the IT market intelligence company.

Displays


Lockdowns hit sales but LFDs show their potential to contribute to pandemic recovery

London, 29 May 2020 – Sales of large-format displays (LFDs) were already being affected by the Covid-19 pandemic before a dramatic drop in early Q2 2020, according to the latest data published by CONTEXT, the IT market intelligence company. This decline reflected the effects of lockdown measures as these devices are heavily used in public settings. On the positive side, digital signage has the potential to support the safety-conscious ‘new normal’ in a range of spaces. If indications that the pandemic is now being brought under control are accurate, and if lockdowns can be released safely, it is reasonable to hope that the category will recover with renewed confidence in its ability to make a difference to business and wider society.

Imaging


Consumer models drive print market, but distributors should prepare for business renewal

London, 24 June 2020 – In May 2020, the consumer print market dominated (inkjet MFPs continued to shine, with sales driven by low-cost consumer models), and business spend continued to suffer, according to the latest data from CONTEXT, the IT market intelligence company. The shift towards consumer sales has been dramatic and sudden. Now, with lockdowns easing, distributors should be prepared for the market to move in the opposite direction.

Enterprise


Coronavirus: the server market is recovering from the COVID crisis

London, 19 June 2020 – The market for servers in the European IT distribution channel is on the up, according to the latest data published by CONTEXT, the IT market intelligence company.

3D Printing


COVID-19 concerns make 2020 3D printer sales outlook challenging; strong growth returning post-pandemic

A weak Q4 2019, now compounded by potential supply-and-demand constraints associated with the coronavirus pandemic, leave the global 3D printer market set to see fewer printers ship in 2020 than in 2019.




Notebook sales in Western Europe maintain momentum while desktop demand dives

London, 26 May 2020 – In April, volume sales of notebooks through Western Europe’s largest distributors maintained their momentum and increased by +46% year-on-year while sales of desktops dropped by -32%, according to the latest data published by CONTEXT, the IT market intelligence company.

Growth in notebook sales reached +45% in March, when strict measures to contain the spread of coronavirus across Europe led to a rise in demand for devices to facilitate remote-working and home-schooling. This unexpectedly high demand, coupled with disruptions to supply, left distributors with a growing order backlog. In April, as supply improved, the channel was able to work on fulfilling orders – leading to another month of high sales and the +46% growth noted above. The increase was primarily driven by commercial laptop sales: these were up +70% whereas those of consumer notebooks increased by +20%.

The picture was very different for desktop computers. During April, sell-through in this category dropped by -32% year-on-year. While demand suffered from customers shifting their focus to mobile solutions in response to the current crisis, last year’s good performance also had an impact on the year-on-year comparison: it was at exactly this time in 2019 that desktop sales began to increase as a result of commercial Windows 10 migration demand. An increasingly high baseline for year-on-year figures, combined with the expectation that desktop demand will remain weak, means this trend is likely to continue throughout Q2.

While the recent spike in demand for notebooks will end, the devices will remain central to future sales as organisations across many different sectors rethink the ways they handle home- and flexible working, and digitalisation increases.

                        Y/Y PC volume growth: Western European distribution

                         PC volume sales: Western European distribution




Lockdowns hit sales but LFDs show their potential to contribute to pandemic recovery

London, 29 May 2020 – Sales of large-format displays (LFDs) were already being affected by the Covid-19 pandemic before a dramatic drop in early Q2 2020, according to the latest data published by CONTEXT, the IT market intelligence company. This decline reflected the effects of lockdown measures as these devices are heavily used in public settings. On the positive side, digital signage has the potential to support the safety-conscious ‘new normal’ in a range of spaces. If indications that the pandemic is now being brought under control are accurate, and if lockdowns can be released safely, it is reasonable to hope that the category will recover with renewed confidence in its ability to make a difference to business and wider society.

After a strong 2019, where sales growth was in double figures, there was significant slowdown in LFD sales over Q1 2020 with a total decline -1% year-on-year. This was due not only to the spread of Covid-19 in Europe but also to factory closures in Asia during the early days of the pandemic. That said, there was one sub-category which continued to do well in Q1: sales of interactive models, which are used for office collaboration and classroom teaching, were up by +14%. However, this too ended in early Q2 as widespread lockdowns across Western Europe (WE) led to a dramatic decline across the entire sector.

      Y/Y large format displays (LFD) volume growth: Western European distribution

 

Total sales of LFDs designed for digital signage, public information or collaboration declined by 46% year-on-year in the first five weeks of Q2 2020, affecting all vendors and almost every country in WE. It will take time for these losses to be recovered. Large-scale events have been postponed and demand for LFDs for indoor applications has fallen – we need desktop monitors, not boardroom screens, for school students and office workers now based at home. Transport, hospitality, and bricks-and-mortar retail – all important verticals for LFDs – have suffered. Fewer commuting office workers means a smaller audience on transport networks. Moreover, the future of the communal touchscreen is in question: except in a few specialist applications, convenience will not survive anxiety about hygiene and shared surfaces. It will be interesting to follow how vendors adapt and rise to the challenge of creating alternatives to touchscreens.

Despite the difficult environment, there are opportunities for the LFD industry as lockdowns gradually ease, societies begin to reopen, and the world finds out what the new normal will be. Digital signage can help public spaces adapt to the need for social distancing, thanks to its ability to convey clear messages at the same time as offering the options of personalisation and adaptability. Even where strict lockdowns remain, it can reach consumers in outdoor spaces used for exercise and support online sales while shops are still closed. As LFDs are set to help us reintroduce some of our day-to-day activities whilst enabling us to keep a safe distance, the sector has a good chance of making a full recovery – especially if current opportunities to innovate and contribute are fully realised.

 




Consumer models drive print market, but distributors should prepare for business renewal

London, 24 June 2020 – In May 2020, the consumer print market dominated (inkjet MFPs continued to shine, with sales driven by low-cost consumer models), and business spend continued to suffer, according to the latest data from CONTEXT, the IT market intelligence company. The shift towards consumer sales has been dramatic and sudden. Now, with lockdowns easing, distributors should be prepared for the market to move in the opposite direction.

Graph 1: Printer volume Y/Y change by category – WE distribution (May 2020)

Overall volumes held steady year-on-year, although results varied by country. There were marked declines in revenue, mirroring falling business sales. Revenues fell by -40.1% in France and by -27.2% in the UK. Revenues in Spain and Italy fell by -6.9% and -5.7% respectively. The revenue split in May this year was 58.9% business to 41.1% consumer, compared to 73.1% business and 26.9% consumer in May last year (there are 2 more working days last year compared to this year). In normal times, revenue figures favour the business sector because of the fewer, bigger investments that businesses make. This hit to the business share will gradually reverse once business demand is back, and once excess stock has moved through to final customers.

Graph 2: Printer revenue share by targeted-customer segment – WE distribution

 

Sales to consumer channels held steady, and sales to business channels fell. Unit sales to corporate resellers dropped by -39.4% year-on-year, and sales to etailers focused on serving businesses were down -28%. Sales to consumer channels were up by +2.2% for retail chains and +11.2% for consumer etailers, as lockdown working encouraged consumers online to refresh home equipment. In this consumer-driven market, inkjet MFPs did well; the coronavirus lockdowns challenged other categories, particularly sales of business laser devices. The changes are likely to have generated an excess of inventory in the channel, and we may see promotions as more normal activity restarts.

Although the situation varies by country, the trends over the last couple of months are clear: consumer inkjet MFPs are performing well, business spending is down, and the market has shifted towards consumer printers. As offices begin to reopen, distributors should be anticipating a rebound in business sales in the second half of the year.




Coronavirus: the server market is recovering from the COVID crisis

London, 19 June 2020 – The market for servers in the European IT distribution channel is on the up, according to the latest data published by CONTEXT, the IT market intelligence company.

                      Server Y/Y Revenue Growth (rolling 4 weeks): Europe

Revenues from the server market, which includes server systems and upgrades, have returned to pre-COVID-crisis level in the latest weeks. However, the picture is more nuanced when looking at country level.

                                 Server Y/Y Revenue Growth (rolling 4 weeks)

Sales are catching up well in Germany, Italy and Spain and have entered positive growth territory. Indeed, Spain and Italy are positively growing in Week20, which includes Week17 to Week20 revenues as a rolling 4 weeks, with respectively +2.4% and +9% year-on-year revenue growth while Germany is showing +10.6% increase on the same period. Meanwhile other countries are lagging behind. There are no signs that distributors in France and the UK have seen transaction pick up of the last few weeks with the former declining by -37.9% in Week20 and the latter showing a revenue reduction of -34%. This is not completely unexpected as, traditionally, a smaller proportion of infrastructure business in these markets goes through the distribution channel.

                                Server Y/Y Revenue Growth (rolling 4 weeks)

The CONTEXT corporate reseller panel shows strong server sales over the last month in these 2 countries offsetting, to some extent, the negative impression of recovery given by looking at the distribution channel alone. Week18 revenues, which includes Week15 to Week18, grew by +14.6% in France and by +33.6% in the UK compared to the same period last year. In those 2 countries, infrastructure sales tend to go more heavily through tier-one corporate resellers, and those resellers also quite often deal with large and more complex infrastructure projects. As lockdown eases, larger organisations are back to business as usual whereas smaller companies have been slower to resume operations and this could go some way to explaining the difference in sales pick-up between distribution and tier-one corporate channels. Corporate resellers in Germany and Southern Europe tend to buy from distributors (around 80% of corporate reseller business in Spain goes though the distribution channel) which is why COVID recovery is much more visible in the distribution-channel data for these countries.

Therefore, if we use a multichannel perspective, we can say with confidence that the server market in Europe is in a post-COVID phase. Distributors in France and the UK still have some catching up to do but this should happen in the next few weeks as lockdown measures are eased further and the market continues to see the positive impact of projects put on hold being resumed. However, since industries such as retail, hospitality and tourism will be working at only half capacity for the next few months, we should not expect a boom in infrastructure sales any time soon.




COVID-19 concerns make 2020 3D printer sales outlook challenging; strong growth returning post-pandemic

A weak Q4 2019, now compounded by potential supply-and-demand constraints associated with the coronavirus pandemic, leave the global 3D printer market set to see fewer printers ship in 2020 than in 2019.

As of the end of Q1 2020, many 3D printer companies from the US, Europe, China and everywhere across the globe have rightly refocused their effort away from printer sales to producing much-needed supplies to help combat coronavirus, according to the latest data by CONTEXT, the market intelligence company.

Focusing efforts on producing much-needed medical supplies has meant a move away from the production and sale of printers towards service businesses and service-bureau infrastructure. Coming on the back of weak shipments in Q4 2019, this refocus – and the supply-and-demand constraints expected in the weeks to come – looks to make 2020 a difficult year for 3D printer shipments.

While COVID-19 had not yet had an impact, global 3D printer shipments were already unseasonably weak in Q4 2019. For many manufacturers – particularly those focused on Industrial* or Design* price-class printers – this slowdown was associated with a weak automotive market, a generally weak manufacturing sector and sluggish Asian and European economies.

CONTEXT notes that printer shipments over the quarter saw year-on-year changes of -11% (Personal* price-class printers), +26% (Professional* printers), -22% (Design) and -23% (Industrial); the only increase being in the hot Professional category.

Over the year as a whole, there was only +1% growth in shipments of Industrial printers compared to 2018; in the Design segment, -6% fewer printers shipped; and finished-good Personal printer shipments were down by -11% as demand continued to shift to kits, sales of which are hard to quantify. Once again, the only year-on-year growth was in the Professional segment where shipments rose by +16% as many longstanding 3D printer companies returned to the space and others, previously focused on producing Personal printers, moved up into it.

Chart 1: Yearly global finished-good 3D printer unit shipments and growth by price class (note two scales)

In the finished-good Personal 3D printer market, 2019 was strong for established vendors such as XYZPrinting, Prusa Research, Monoprice, Anycubic and Flashforge but it was the more ill-defined kits market which drew the most industry attention. The leader in the kits space - and far-and-away the market share leader in the global 3D printer market when considering both kits and finished-goods - was China’s Creality 3D. While it was once assumed that consumer demand for DIY kits would fade away in the face of the better out-of-the-box experience offered by completed machines, self-assembly – largely catering to hobbyists – has come back into vogue in recent years. This is thanks to not just very low price points but also protectionist measures which favour the importation of parts that can be assembled locally over finished goods even though, in this case, the assembly is on an individual do-it-yourself basis rather than factory-level production. The number of DIY kits shipped in 2019 was almost twice as high as that of finished printers but, if aggregated into the annual total, sales to this nebulous market would have increased global revenues by only +9%.

In the Design and Industrial segments – which collectively accounted for over 78% of all 3D printer sales revenue – aggregate shipments were down -3% for 2019. Although metal 3D printer shipments were up +4% on the previous year, with steady growth seen in emerging technologies like material extrusion and directed energy deposition, there was a -10% decline in those of mainstream powder bed fusion printers. Market leaders GE Additive and EOS were joined in the top 5 by Desktop Metal and Markforged (both of which offer material extrusion based solutions) and newcomer HBD which performed strongly in China, its domestic market. Overall shipments of Industrial and Design polymer printers fell by -5% compared to 2018 but certain vendors, including HP and UnionTech, saw excellent growth. Stratasys remained the market leader in terms of unit volumes even though annual shipments dropped by -12% in 2019.

Chart 2: 2019 Global 3D printer unit market share leaders: Industrial and Design price classes

Forecasts for 2020, based on information available as of 23 March, show printer manufacturers are now assessing, on a daily basis, the impacts of a disrupted supply chain and uneven human productivity on both their own ability to produce hardware and the end-markets to which they cater. In recent years, vendors have typically begun with a bullish outlook and slowly adjusted their shipment outlook over the year. Currently, however, vendors are offering only informal/high-level forecasts: most are beginning 2020 with a negative outlook and anticipating they will recover as business begins again once the global pandemic subsides. While each printer class caters to different users, many of the key end-markets (such as the dental, aerospace, automotive, consumer product, orthopedics and education markets) are negatively affected by global work closures and slow-downs. On the supply side, key components for printers, as for many other electronic goods, come from China, the region impacted first by the pandemic. As a result of the uncertainty, hardware vendors are now thinking in terms of weeks and quarters rather years, and current aggregate forecasts show the Industrial and Design segments are set to see shipment declines of -4% from 2019 to 2020 even taking into consideration a recovery in the 2nd half of the year.

In the Industrial market – which accounted for 68% of global 3D printer hardware revenues 2019 – shipments in the second half of 2019 were slow, even though this is usually the strongest part of the year, and the outlook for 2020 was, therefore, already challenging. Taking into account both these negative headwinds and the supply-and-demand challenges associated with global reactions to the coronavirus, this segment hopes to see a slide of only -2% in printer shipments in 2020 after its 5-year CAGR of +14% and anticipates a rolling recovery by region, starting with the East.

As the pandemic comes under control and economies return to normal, there is great potential for the 3D printer market since the ability of the technology to assist with the immediate needs of the medical community have showcased its quick-turn capabilities worldwide. Responses to the pandemic are also demonstrating that leveraging 3D printing for local production, instead of relying on complex multinational supply chains, has the potential to help many companies mitigate future risk.

                  Chart 3: Global Industrial 3D printer shipments and forecast

 

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