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CONTEXT Research Updates deliver timely insights on key market segments.

  • PCs
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PC Research update


COVID-19-driven notebook momentum continues in Q2 2020

London, 03 Aug 2020 – The strong pandemic-related notebook momentum seen at the end of Q1 2020 carried on into Q2, according to the latest data published by CONTEXT, the IT market intelligence company.

Displays


Monitor demand remains strong as supply begins to recover

London, 10 July 2020 – Sales of monitors through distributors in Western Europe (WE) grew +14% year-on-year in the part of the second quarter of 2020 up to the first three weeks of June, according to the latest data published by CONTEXT, the IT market intelligence company.

Imaging


Distributors see boom in ink-tank printer sales during COVID-19 pandemic

London, 05 Aug 2020 – Western Europe’s distributors sold an unprecedented number of ink-tank printers in the second quarter of 2020, according to the latest data published by CONTEXT, the IT market intelligence company.

Enterprise


Coronavirus crisis increases sales of home networking products

London, 10 Aug 2020 – Sales of home networking products have been positively impacted by the COVID crisis in Europe with households updating their wireless equipment to enable working from home and improve web access for the whole family, according to the latest data published by CONTEXT, the IT market intelligence company.

3D Printing


China and Desktop 3D Printer markets lead the way for longer U-shaped recovery

Latest CONTEXT market intelligence highlights varying impact of the global pandemic on the 3D printer industry in Q2 2020




COVID-19-driven notebook momentum continues in Q2 2020

London, 03 Aug 2020 – The strong pandemic-related notebook momentum seen at the end of Q1 2020 carried on into Q2, according to the latest data published by CONTEXT, the IT market intelligence company.

Notebooks continued to see extraordinary growth across Western Europe’s largest distributors, with volumes up +55% in Q2 2020 compared to the same period last year. The Q2 rise was driven by Q1 order fulfilment as product supply improved, but also by newly received orders as demand for remote-working and -learning devices remained high in a quarter which began in a time of strict lockdowns and ended with the easing of the most restrictive measures. Notebook sales were strong across both the commercial and consumer segments, although commercial sales showed the stronger performance: business-targeted notebooks were up by +70.4% year-on-year while consumer systems grew by +38%.

The picture was entirely different for desktops: volumes in the category dropped by -27.8% year-on-year in Q2 2020, with commercial systems down -31.6% and consumer products -17.5%. OEMs across all Western European countries saw demand for the category dive, and distributors have been voicing strong concerns about the resulting rise in stock levels. Clearly, the pandemic has acted as an accelerator of the move towards mobile systems at the expense of stationary products. It should be noted, however, that commercial desktops faced a difficult year-on-year comparison in Q2 2020, with +17% growth one year ago as organisations prepared to migrate to Windows 10.

Looking at channel sales, consumer channels saw a dip in share of sales to retail stores following pandemic-related shop closures in March, to the benefit of sales to consumer etailers. Volumes of business-targeted notebooks to SMB resellers dropped sequentially in April while sales to consumer etail saw a rise, suggesting that some smaller companies moved to buy online when a number of small and medium resellers became inactive during the peak of the crisis.

The numbers are consistent with the challenges posed by the pandemic - including changes in demand and purchasing behaviour, the closing of shops, companies becoming temporarily inactive, and offices across the continent going remote. Notebooks have proved to be the form factor of choice; other IT equipment geared to facilitate remote working and homeschooling has also done well during the crisis, including monitors, accessories and communications software.

Moving into Q3 2020, portable demand is expected to stay healthy in a number of segments.There is however, a high level of uncertainty regarding the impact of the crisis on Western European economies, meaning that a lot of organisations will be very cautious when it comes to IT spending over the next few months.

Y/Y PC volume growth: Western European distribution



Q2 2020 Y/Y PC volume growth: Western European distribution




Monitor demand remains strong as supply begins to recover

London, 10 July 2020 – Sales of monitors through distributors in Western Europe (WE) grew +14% year-on-year in the part of the second quarter of 2020 up to the first three weeks of June, according to the latest data published by CONTEXT, the IT market intelligence company.

Strong consumer demand drove the increase as, under lockdown, individuals have been buying monitors for home offices, study environments, and gaming and leisure setups. Sales of consumer monitors have therefore soared: they were up +29% year-on-year in April, +39% in May and +43% in June. Sales of business monitors were below the 2019 level at the start of the quarter. However, this improved in the first three weeks of June (W23–25) when sales – primarily to small, medium and corporate resellers – were up +14% on last year.

Even while business-targeted monitors were struggling, distributors continued to work with their business-focused partners, sometimes selling them models usually aimed at consumers. Although this suggests that a monitor’s specifications and price bracket matter more to customers than whether it has been designated a business or consumer device, some of the shift was probably the result of limited supply.

Desktop monitors: Weekly unit sales by target customer, WE distribution





 

Strong demand in the second quarter coincided with low supply for many vendors as a result of the factory closures earlier in the year. In countries where demand was continuously very high, such as the UK, stock levels were down to only one or two weeks’ worth. This did not, however, have an adverse effect on the quarter’s results.

The same strong demand was seen across several of the major WE countries – Germany, Spain, and the UK – despite earlier concerns that the pandemic would soften spending. While unit sales for April and May were down year-on-year in France and Italy, there was a turnaround in June when both these countries showed strong year-on-year gains. Sales of cheaper monitors, particularly those retailing at less than 100 euro, helped the recovery. Indeed, there were growing sales of these lower-end models across WE, particularly to corporate resellers (+33% year-on-year). Sales to retail chains and business etailers also improved.

Desktop monitors: Weekly unit share by price band, WE distribution



Supply is expected to reach normal levels during Q3, and vendors should be able to respond to any extra demand from businesses that feel they can renew equipment for staff returning to offices as lockdowns ease. The coming quarter is traditionally weak because of holidays and, even though there will be less travelling this year, it would be unwise to be optimistic about the coming months. Vendors and distributors are also concerned about the extent to which demand may have peaked in the first and second quarters of 2020, affecting the second half of the year. There is much still to learn about the pandemic and what it means for people and their material needs.




Distributors see boom in ink-tank printer sales during COVID-19 pandemic

London, 05 Aug 2020 – Western Europe’s distributors sold an unprecedented number of ink-tank printers in the second quarter of 2020, according to the latest data published by CONTEXT, the IT market intelligence company.

The increase reflects the continued growth of a technology that is relatively new in Europe. Marketed as a smart investment that delivers long-term savings, ink-tank printers appeal to users wishing to equip their homes with durable hardware. Control measures associated with the pandemic have, therefore, created conditions that favour adoption of these devices. Price increases resulting from a shortage of traditional consumer inkjet printers, and shortages of ink cartridges, have also encouraged uptake of ink-tank models.

The steadily increasing market share and the strong upward month-by-month sales trend suggest that ink-tank printers may well end the year with a higher share than last year’s 4.9%. In the second quarter of 2020, the number of traditional ink-cartridge printers sold fell year-on-year while ink-tank sales saw dramatic increases.

Ink-tank printers accounted for 6.6% of sales of inkjet units sold in Western Europe in the first half of 2020 (up +2.3 pts compared to the same period last year), and for 15.7% of inkjet revenue, with sales of ink-tank printers through the distribution channel increasing by +59.8%. This overall figure disguises the details of the trend: unit sales climbed throughout the spring, with year-on-year growth rates climbing from -11.1% in January to +89.6% in June.

Graph 1: Printer volume sales: Y/Y change by category – WE distribution



The year-on-year performance of ink-tank printers in the major Western European markets exploded in the second quarter, coinciding with lockdowns. In the first quarter, the number of units sold in Germany was down by -30.3% on the previous year; in the second quarter they were up by +110.7%. In the UK, they moved from +19.4% in the first quarter to +142.5% in the second; and in Italy from +69.5% to +149.3%. There was also a change in unit sales in France: from -14.9% to +70.3%.

 

Graph 2: Ink-tank printer volume sales: Y/Y change by country – major WE economies
 



The geographical spread of ink-tank printer sales in Western Europe largely follows the size of the market in each country with four of the Top 5 heading the list. Germany took 25.2% of ink-tank sales, representing a fall from its even bigger share of 36.2% in the first six months of 2019. Italy followed with 19.3%; the UK took 13.7%; and Spain 11.2%. Whilst the UK’s share held steady, Italy and Spain both increased their shares compared with the same period last year. France took only 2.7% of sales compared with 3.7% in the first half of 2019 – a smaller share than the other major countries in both years.

The mix of brands is steadily diversifying as more vendors explore Europe’s potential. Epson, an early champion of the technology, took 79.2% of the market in the first half of 2020; 24.1% of its inkjet units were ink-tank models, and they provided 41% of its revenues for the category. Other major vendors are making inroads: HP’s and Canon’s shares of the ink-tank market increased in H1 2020 compared with the first half of 2019 (8.8% and 5.9% share respectively).

Although the pandemic has encouraged uptake, there are other positive indicators – a diversifying share of the market across countries and across vendors – suggesting that ink-tank models are poised to steadily replace traditional consumer inkjet printers in Western Europe.




Coronavirus crisis increases sales of home networking products

London, 10 Aug 2020 – Sales of home networking products have been positively impacted by the COVID crisis in Europe with households updating their wireless equipment to enable working from home and improve web access for the whole family, according to the latest data published by CONTEXT, the IT market intelligence company.



Growth in Q2 was driven by sales of extenders and mesh systems whilst there was a more moderate increase in router sales. This confirms that consumers have been looking for solutions to improve WiFi coverage in their home by eliminating dead spots rather than by updating core networking devices (such as routers).

Monthly Y/Y Revenue Growth



However, year-on-year sales of routers picked up in June, after only slow growth in April and May, and contributed to making June the strongest month of the quarter for this category. It shows that consumers who had prioritised increasing household WiFi coverage at the start of the crisis are looking at updating the main component of their network as the possibility of a longer time at home becomes more real. And, in doing so, they are prepared to make an investment in more expensive products: the average selling price for routers sold in June was higher than April and May.

Routers: Average Selling Price (Euro)



Looking at the product mix sold over Q2 2020 provides a partial explanation for this change. Spending at the beginning of the quarter was, for many households, an unplanned emergency response. In Italy – where home networking revenues grew by +60% year-on-year in Q2, the second top highest of any of the Top 5 European countries – mobile broadband router revenues grew by more than 200% in April when large numbers of cheap pocket routers were sold. This makes perfect sense: Italy has the cheapest mobile broadband contracts in Europe and consumers jumped on inexpensive mobile router options while taking advantage of these contracts at the start of the crisis. Another example of this trend is the relatively high volume sales of older WiFi-N extender products seen in April.

Italy Focus: Monthly Y/Y revenue growth



 

The improved performance of more traditional and more expensive routers in June, including DSL and cable modem routers, is good news for vendors who may have missed out on the first wave of home-network spending. Increasing sales of WiFi-6 standard devices, which now account for 5% of consumer router and extender revenues, is another positive signal of more value being added.

We have also heard that households are updating their broadband package, or even changing internet providers, in order to solve issues they faced during lockdown. With uncertainty about a second wave of COVID cases, and the possibilities of further lockdowns in Europe, the outlook for home networking is bright. Consumers are already looking at longer-term investment to handle the new normal, and the positive effect on revenues from home-networking devices should continue in the months to come.




China and Desktop 3D Printer markets lead the way for longer U-shaped recovery

LONDON, 14 Oct 2020 – The global 3D printing market saw a+24% second quarter sequential rebound in domestic unit shipments of Industrial-class printers in China, and a global surge of +68% in Personal desktop printer shipments, according to latest data published by CONTEXT, the IT market intelligence company. These trends give hope to an otherwise depressed 3D printer market that saw hardware revenues fall by -27% from a year ago.

Shipments of high-end and mid-range 3D printers (that is, those in the $100K+ Industrial and $20K–$100K Design price classes) stalled significantly as businesses in the West put capital expenditures on hold and large parts of key industries were still paused. However, demand for Professional price-class printers ($2.5K–$20K) remained strong as people continued to work from home. Hobby-level Personal printers (<$2.5K) were also in demand and shipments of these are no longer hampered by supply-chain limitations now that production in China has resumed. Aggregate revenues from new printer shipments rose marginally from Q1 to Q2 (by +5%) but were down -27% from Q2 2019. Industrial printer sales accounted for 62% of global finished-good revenues in the period.

                   Chart 1: Global 3D Printer Shipment Revenues by Price Class



Industrial price class (≥ $100K)


As China came back on-line in Q2 2020, so too did demand for Industrial printers. Indeed, many Chinese vendors reported seeing shipments not just rise compared to Q1 but also witnessed even higher shipment rates than a year ago. While overall shipments improved slightly from Q1 to Q2 thanks mostly to a bounce back in China, they remained very low in Western markets resulting in total shipments in the class down -38% from a year ago. This portion of the market was already facing negative headwinds at the end of 2019, prior to the onset of the pandemic, but vendors are noting accelerated interest following the important role that 3D printing played in the heart of pandemic shutdowns.

Almost all non-Chinese top 20 Industrial printer companies saw sizable year-on-year declines in the number of units shipped – with the notable exception of metal machine producer SLM Solutions. China’s UnionTech, Farsoon and HBD saw not only a sequential rise in shipments but also saw shipment totals actually greater than last year. Germany’s SLM Solutions has come back nicely from their reset year last year and were shipping against orders placed prior to the onset of the pandemic. While some vendors reported a slight sequential rebound in shipments, most saw a double-digit year-on-year drop in shipments from a year ago.

Design price class ($20K–$100K)

With 78% of this class of printers being shipped to Western countries, and with US and European economies effectively on hold throughout at least April and May, this segment faced significant challenges. Key end-markets, such as the dental industry, were largely closed down, severely impacting demand. As Western markets slowly began to re-open in June, demand rebounded slowly but unit-volume shipments were still down -34% on the previous year. The leaders in this segment, 3D Systems and Stratasys, accelerated layoffs in response to the pandemic and used the period to reset strategy.

 

Chart 2: Industrial and Design 3D Printer Shipments and

Y/Y Growth by Region



 

Professional price class ($2.5K–$20K)

 

The strong Q1 demand for this type of printer, which arose from new homeworking scenarios, continued into Q2. Buyers are looking for ever-more professional products with even more robust feature sets. This has pushed average street prices up and allowed printer revenues to rise nicely even while shipments are only marginally better than a year ago. Weighted average prices for these printers have risen +15% since the beginning of 2019 making this the only price class to see year-on-year revenue growth (of +7%) in Q2 2020.

 

Personal price class (≤ $2.5K - excludes DIY kit printers)

 

Many products in this class either come directly from China or are highly dependent on supply chains associated with the country. While demand from quarantined hobbyists increased in Q1 2020, supplies were limited and, thus, new-product shipments were significantly hindered. This changed in Q2 when Chinese production came back online leading to a quarter-on-quarter shipment surge of +68%. While, in recent quarters, the finished-good market has been losing share to the growing kits market (dominated by Chinese players like Creality and which also saw great sequential shipment growth), Q2 was the first period since the beginning of 2018 in which non-kit printer shipments grew year-on-year, up +2% from Q2 2019.

 

Looking forward

 

While the market for new printers in a few key areas was challenging, the demands made of the installed base of printers in all price ranges increased as they were used to create pandemic-related items ranging from PPE to nasopharyngeal swabs. While this could not fully compensate for lost demand from closed markets (such as consumer products, education and the dental and automotive industries), it clearly demonstrated the flexibility of the technology showing how it can be leveraged to help overcome supply-chain disruptions and could, in future, be so used across many industries. While recovery in the West is proving to be slower than some had anticipated, vendors have been reporting renewed interest in the technology throughout Q3 – from new sectors as well as known markets. They are hopeful that this interest will turn into Q4 orders: the final quarter typically accounts for 29%+ of each year’s shipments but it is now anticipated that it will account for 36%+ of those in 2020. The challenge to fulfilling these expectations is that key in-person events such as Germany’s FORMNEXT, where many large deals have historically been finalised, remain virtual as the West continues to deal with the pandemic.

 

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