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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


Desktop monitor demand surges but supply pool dries up

London, 06 May 2020 – Sales of monitors through Western Europe’s (WE) distributors grew by a record +35% year-on-year in March 2020 contributing to an overall +18% increase for the first quarter, according to the latest data published by CONTEXT, the IT market intelligence company.

Imaging


January print sales not impacted by coronavirus but Q1 and Q2 are at risk

London, 2 March 2020 – There is no clear evidence that print sales in January 2020 have been affected by the coronavirus according to the latest distribution data published by CONTEXT, the IT market intelligence company. Print performance could be weaker in Q1 2020, however, and the extent of this depends on how quickly the spread can be contained.

Enterprise


Coronavirus: The Enterprise market is reacting to the crisis

London, 07 April 2020 – The Enterprise market has been slower to react to the coronavirus crisis than the PC and AV-system markets – as early as February, resellers were stockpiling products in anticipation of supply disruption. However, it is possible to see the effects on the Enterprise sector in the Western Europe (WE) IT distribution channel now that numbers for week 12 have been included in 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

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Desktop monitor demand surges but supply pool dries up

London, 06 May 2020 – Sales of monitors through Western Europe’s (WE) distributors grew by a record +35% year-on-year in March 2020 contributing to an overall +18% increase for the first quarter, according to the latest data published by CONTEXT, the IT market intelligence company.

Monitor sales, particularly to business customers, were expected to grow in the first half of 2020 – but not at the scale witnessed in Q1. In the second half of February, after many factories in China had been closed, distributors began to see increased orders as their customers prepared for future product shortages. And then the lockdown of most European countries in March led to many employees moving to working from their own homes. This transition resulted in a surge in demand for desktop monitors as well as PCs and computing accessories. School closures also helped drive growth of consumer sales as many parents found they had to share equipment with children suddenly being home-schooled. Moreover, despite the economic turmoil caused by the virus, there is still high demand for monitors from the public sector for, for example, hospitals and government departments. This increased need for display equipment led to sales of both business- and consumer-targeted models growing by +18% year-on-year in Q1.

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

The biggest change in demand was seen in week 12, particularly in the UK and Germany where March sales grew by +66% and +48% year-on-year, respectively. Meanwhile, distributors in France and Italy, whose sales had spiked in the second half of February, saw demand slow down over March resulting in respective year-on-year declines of -15% and -21% for the month. Sales in Spain, however, continued to boom with growth reaching almost +30% in both February and March. With consumer movement restricted, and stores closed by lockdowns, many industries, including IT, have seen a surge in online sales. Total monitor sales to e-tail increased more quickly than those to other channels, and growth for the quarter as a whole was +33%.

                 Desktop monitors: Weekly unit % share by channel, WE distribution

While many businesses and individuals have been putting off investing in their digital capabilities and hardware over the past few years, the current crisis has made them aware that better solutions are now urgently needed, leading to a rise in demand for more powerful devices that also enable remote working. Demand in Q1 however, was so unexpected and strong that it left many European distributors with very low stock levels. Combined with the supply disruption that has affected most vendors to a greater or lesser extent, this may lead to weaker sales over the coming weeks and, potentially, having an impact on May sales. However, if demand from both private and public sectors remains high and supplies reach normal levels, we should start to see a recovery by the end of Q2, continuing into Q3.




January print sales not impacted by coronavirus but Q1 and Q2 are at risk

London, 2 March 2020 – There is no clear evidence that print sales in January 2020 have been affected by the coronavirus according to the latest distribution data published by CONTEXT, the IT market intelligence company. Print performance could be weaker in Q1 2020, however, and the extent of this depends on how quickly the spread can be contained.

This will also determine whether there will be an impact on one quarter, two quarters or more. We also believe that there will be an impact on component supply, and Q2 shipments are likely to be affected. If it takes longer than the end of March to contain the virus, a bigger impact is expected with production and demand possibly shifting to 2H 2020.

Considering this, vendors might push their customers to bring project-based purchased forward, as waiting could mean that shortages will have a knock-on effect on pricing and customers will then end up paying a premium price.

The ongoing shutdown of operations by China’s major tech manufacturing centres in response to the new coronavirus could have a massive knock-on effect on project fulfillment across WE, and it could, in addition to the disruption caused by the Trade War (between U.S. and China) also have a lasting impact on global supply chains.

The start of Q1 2020 saw printer sales continue to follow the pattern that has characterised the past few quarters, with healthy demand for consumer multi function printers (MFPs), according to the latest distribution data published by CONTEXT, the IT market intelligence company.

However, volume sales of printers through the largest distributors in Western Europe (WE) were down by -2.3% year-on-year in January 2020. Although the consumer segment saw sales increase by +5.8% – mainly driven by good performance from inkjet MFPs (+7.5%) and laser MFPs (which saw exceptional growth of +22.8%) – sales of single-function printers (SFPs) in this market continued to fall sharply (-11.6% for inkjet SFPs, and -23.8% for laser SFPs).

Sales of, and revenues from, consumer inkjet MFPs increased in almost all WE countries during January 2020 with the United Kingdom seeing the strongest growth (+34.7% in terms of units and +20.4% in revenues). In Italy, consumer printer sales also continued to rise (year-on-year increases of +2.9% in units sold and +6.2% in revenues) with most retailers and small resellers benefiting from minimum order sizes and credit lines offered by the Distribution channel.

   Graph 1: Consumer printer volumes and Y/Y change by category – WE distribution 

Looking at the business targeted-customer segment (which account for 34% of printer sales and 67% of revenues in WE), we saw a sharp decline in early Q1 2020. The fall of -14.8%, mainly driven by poor performance of MFPs across almost all countries (sales of both inkjet and laser MFPs were down by -18.5%), led to a drop of -11% in revenues. This trend in MFP sales is likely to change in the coming months, particularly in Italy where the recent award of a government tender/contract for multifunction and Managed Print Services (MPS) for Public Administrations (Regional/Municipal offices) with an overall value of €100 million will push up sales in this category.

Graph 2: Business printer volumes and Y/Y change by category – WE distribution

 

 




Coronavirus: The Enterprise market is reacting to the crisis

London, 07 April 2020 – The Enterprise market has been slower to react to the coronavirus crisis than the PC and AV-system markets – as early as February, resellers were stockpiling products in anticipation of supply disruption. However, it is possible to see the effects on the Enterprise sector in the Western Europe (WE) IT distribution channel now that numbers for week 12 have been included in the latest data published by CONTEXT, the IT market intelligence company.

                                    UC and collaboration revenues: Y/Y    

As expected, the UC and collaboration segment – which includes business communication and collaboration products such as VOIP systems, headsets and cameras – is performing well, boosted by the growing numbers working from home. As the graph above shows, the gains of week 11 accelerated in week 12, and we are expecting this trend to continue into April.

                                   Network management and security: Y/Y

Network management and security – the category that includes VPNs, gateways and firewalls – is also on the up as businesses update their networking infrastructure to enable their employees to work from home. This is especially true of SMBs, many of which did not previously have the infrastructure in place to allow remote working. The change is even more noticeable given that this segment of the market had been in constant decline throughout 2019 and into January 2020.

                              Virtualisation and security software revenues: Y/Y

The current situation is also proving positive for the Enterprise software segment, with virtualisation and security software benefitting. The need for more endpoint security licenses, networking security licenses, and virtual machines is pushing up sales in those categories.

                                                Infrastructure units: Y/Y

The other side of this story is the reduced demand for IT infrastructure as confinement and lockdowns have an increasing impact on sales with those of servers and network switches showing more marked signs of decline in week 12. However, confirmation of whether or not this is a real trend will come in the next few weeks – the end of the quarter could bring a few deals that make up the loss. Even so, business closures are leading to a marked break in infrastructure investment. For example, we understand that resellers in Southern Europe cannot reach their traditional clients who are closing or, at best, re-focusing their resources into managing the crisis rather than investing in IT infrastructure. We are also seeing the same decline in demand for wireless infrastructure as offices empty and the installation of wireless access point networks is delayed or cancelled.

Looking forward, software and collaboration products should continue to thrive, and businesses are also likely to need more networking equipment to enable and optimise homeworking. Conversely, there is a worry that demand in the infrastructure segment will slow further as the confinement rules remain at the current levels.




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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