Research Updates

London, 23 March 2022 – Windows 11 has achieved a market share of just 5% in the Windows commercial PC space four months after its launch, although the exceptional circumstance of today’s business market may be partly responsible, according to CONTEXT, the IT market intelligence company.

CONTEXT data compared the speed of adoption of the Business version of Microsoft’s new operating system with those of Windows Vista, Windows 7, Windows 8, Windows 8.1 and Windows 10. It revealed that Windows 7 had the quickest uptake among business customers, reaching a Windows Business market share of over 70% after four months. Windows 8 had topped 40% by the same stage. Windows 10 had a similarly slow start to its successor but then picked up the pace rapidly to reach a share of 30% by four months in.

It should be remembered, however, that commercial uptake of new operating systems is always slower than consumer markets. Windows 11 currently has a current share of 35% among Windows consumer PCs, for example. In addition, the supply and demand factors influencing today’s post-pandemic market are very different from those in 2015, when Windows 10 launched.

Windows still out in front

There has been a fair bit of movement in revenue performance since the start of the pandemic, among the three main notebook operating systems. Apple gained substantially over the past few months due to demand for its M1 CPUs, although its year-on-year revenue performance is flattered to a lower 2021 average than other vendors. Chrome’s performance dipped sharply in recent weeks due a slowdown in education projects versus the first one-and-a-half years of the pandemic.

It is, however, Windows that continues to dominate in terms of revenue sales, despite recent Apple gains. Chrome continues to represent only a small share of the market. As of Week 9, Windows’ rolling four-week average stood at €150m, versus a little over €50m for Mac OS and less than €10m for Chrome OS.

Notebook and desktop sales slide

At the end of February and in the first week of March, we have seen both notebooks and desktops trending below the 2021 average. Both have seen strong fluctuations in Q1 to date but for different reasons. In the case of notebooks, a January peak was driven by improved supply. For desktops, a sales uptick in the same month can be traced back to strong performance in the UK, ahead of anticipated COVID restrictions being lifted and offices reopening.

Hovering below the 2021 average is bad news for desktops given that sales were weak last year. However, in the case of notebooks, sales are still significantly higher than pre-pandemic levels.

Notebook revenue trends in almost all major European markets are trending below 2021 averages but above those of 2020. The outlier is Germany, which is currently seeing sales performance below both years. The country has been impacted strongly by notebook supply issues and a move by some vendors to prioritise direct sales transactions in times of weak supply. Both have contributed to weak distribution performance of late.

London, 2 December 2021 – Notebook revenues through European distribution have continued their impressive performance in the first few weeks of Q4 2021 as organisations look to support the new hybrid workplace and consumer sales are up, according to new data from CONTEXT, the IT market intelligence company.

The latest analysis shows the delta between current sales figures and those of two years ago continuing to grow, although strong comparatives with 2020 meant a 7% year-on-year (YoY) decline in the first 6.5 weeks of Q4.

Whilst trending upwards over recent weeks, desktop sales still remain below the 2019 average as commercial buyers focus on notebooks—both to support their flexible hybrid workforce and to ensure they have enough mobile computing options in case a new wave of mandatory lockdowns sweeps Europe.

Channel players on the up

When it comes to notebooks, SMB and corporate resellers are trending slightly below last year’s figures, although they continue to be way ahead of 2019 sales. Feedback from the market suggests that even though demand remains high for mobile devices, organisations are being more selective. They’re less desperate now for devices, and therefore are focusing more on the specs and performance they need.

Corporate reseller sales remain strong with recent 2021 figures climbing closer to those of a year ago. The impact of large government education sector deals last year appears to be lessening.

In the consumer retail and e-tailer channel segments, revenue growth has exceeded 2020 figures in recent weeks thanks to rising prices and a positive shift in product mix—for example, towards more gaming notebooks ahead of Black Friday, which pushed up ASPs.

Notebook workstation sales surge

One segment that has recorded consistently impressive performance during the pandemic is notebook workstations. Revenues nearly doubled between early Q4 2020 and now. Even before the crisis, the segment benefitted from the shift to mobile products. This accelerated at the start of the pandemic, both because of improved supply versus regular notebooks and increased demand from healthcare organisations.

Notebook workstations continue to see growth because:

• The shift to mobile began a lot later in workstations, so that sales have only recently overtaken desktop form factors
• Low supply of docking stations forced many potential notebook buyers to switch to this segment, where wired connectivity is built into devices

In fact, performance for docking stations in general would have been far better in 2021 were it not for chip component shortages which impacted the supply side. Demand will remain strong for these and headsets, mice and other notebook accessories in Q4 2021 and 2022, as the hybrid workplace continues to take shape.

London, 5 February 2021 – Sales of desktop monitors achieved record growth of 33% in Q4 2020 driven by demand in consumer channels and from small and medium business (SMB) resellers according to the latest data published by CONTEXT, the IT market intelligence company.

Sales of desktop monitors began to accelerate at the start of the pandemic. They slowed briefly in the summer but picked up in September and kept growing throughout Q4, showing that demand was much higher than expected and has not yet been met. Investments in homeworking equipment seem to have continued and, given fourth-quarter holiday sales, gaming monitors saw even more interest than earlier in the year.

Desktop monitors: Volume sales by target customer, WE distribution

The record growth was due to sales of both consumer and business models. Due to lockdowns and office closures, sales to corporate resellers saw another quarter of decline, falling by -6% year-on-year. By contrast, sales to SMB have been recovering, growing by +18% in the same period, and those to retail have more than doubled. However, the need for homeworking and study devices has done more to drive growth than the special campaigns and sales that usually spur sales this time of the year. In fact, the backlog of orders was so high that there was no real need for vendors to incentivise customers.

When it comes to gaming or premium business models, where competition intensifies, the reasons for increased sales are slightly different. For gamers looking for models with refresh rates higher than 144 Hz, the choice keeps growing while prices keep going down. For homeworkers, it is all about specifications like ethernet input that enables monitors to become display and docking station in one, USB-C ports, good quality cameras or ergonomic features: distributors saw significant increases in sales of models with these features in Q4 2020. The majority of vendors are currently facing supply issues – especially for mainstream screen sizes like 21.5″, 23.8″ and 27″ – and this has changed the portfolio of monitors sold: the growth in sales of larger models, curved-screen devices or even small portable monitors may not necessarily reflect customer preferences but the choices they currently have.

Desktop monitors: Volume share by specification, Q4-20 vs Q4-19,

WE distribution

With sales through Western European distributors growing +23% year on year in 2020, Q4 closed one of the best-ever years for the desktop monitor market. This increase has shown that the importance of good screens for home offices was previously underestimated. Investment in homeworking devices happened at different paces in different countries so, although overall growth will probably slow down, demand should still remain high in those parts of Europe where sales picked up later or more slowly and, as a result, Q1 2021 will show increases compared to the first months of 2020 that may carry on into Q2. However, the extent to which the market grows will really depend on the level of supply as this remains challenging and poses major obstacle for many vendors. 

London, 26 Nov 2020 – Sales of desktop monitors through distributors in Western Europe (WE) grew in early Q4 2020, continuing the trend that began at the start of the pandemic. Over this period, sales have been driven not only by continuous high demand from consumers but also by recovery in the business segment, according to data published by CONTEXT, the IT market intelligence company.

In the first month of the quarter, combined sales of business- and consumer-targeted monitors were up by +21% year-on-year. While most of the growth in Q3 as a whole was due to consumer models, sales were up in both segments in October. As expected, consumer e-tail and retail drove the change, but sales to small and medium business (SMB) resellers and business e-tailers also improved. Sales to corporate resellers continued to fall, declining by -8% year-on-year.

Desktop monitors: Volume share by channel, WE distribution

In the past, November (which includes the weeks leading up to Black Friday) has been a very strong month for consumer monitors. In 2018 and 2019, however, sales began picking up in October, and distributors have seen the same thing happen this year: sales to consumer channels (e-tail and retail) in Germany, the UK, Italy and France were more than 20% higher than in September. In the UK and France, October sales grew by over 50% year-on-year whereas in Spain they fell by -6%. It is interesting to note that sales to SMB and business e-tail resellers during this month also grew, indicating a recovery in the business space. In Germany and Italy, sales to these channels grew by +44% and +35% year-on-year, respectively.

Desktop monitors: Consumer channel volume share by

price band, WE distribution

This year has also seen a change in the prices of models sold. Last year, the number of monitors costing less than €200 that distributors sold to consumer channels grew: this year’s increase has been driven by expensive models. Over 26% of monitors sold in October 2020 had 27" screens, but the largest growth was in sales of those with 23.8", 34" or 49" screens. Sales of portable 15.6" screens also increased significantly.

Gaming monitor sales were already growing before the pandemic, and the new circumstances have only accelerated this well-established trend. Increasing competition between vendors offering more and more exciting, high-spec (165Hz and above) models has not only fuelled interest but also pushed prices down, further spurring demand. In October, almost 20% of monitors sold to consumer channels had a refresh rate of 75Hz (a sales increase of +230% year-on-year), 10% were 144Hz models, over 4% were 165Hz, and 2% had an even higher refresh rate of 240Hz. The average selling price of monitors with the most popular screen sizes and high refresh rates was 10% lower than in the same period last year.

With October and November seeing the greatest demand for monitors, Q4 volume sales are expected to remain strong. However, after quarters of growth, the gradual slowdown in the monitor market, and component shortages, will trigger more aggressive behaviour from vendors – and any increased price competition may affect desktop monitor revenues into next year.

London, 22 February 2022 – Revenue sales through distribution of business printers across Europe have remained significantly higher than those of consumer devices in January thanks to the strong performance of Laser SFPs, according to new data from CONTEXT, the IT market intelligence company.

CONTEXT’s Index Revenue Trend graph recorded sales figures for consumer and business markets criss-crossing several times during the course of 2021. But since around Week 50 last year, a gap has opened up between the two, with business revenues on top. They crossed the 100 index baseline in January and continue to rise above the weekly average revenue for 2021.

While volume sales for both business and consumer printers were lower over this period compared to a year ago, business volumes fell at a slower rate. Revenues increased thanks to a different product mix, featuring more high-end devices, and price increases for entry-level and mid-range devices. The latter trend was influenced by a shortage of consumer printers in the same price range—especially Laser SFPs—driving up the average selling price (ASP) and overall revenue performance.

Laser SFPs lead the way

Revenues across all printer categories have been trending upwards since the start of 2022, although inkjet printers are furthest behind due to product shortages in prior months. Laser SFPs now have an index score of over 120, meaning they’re 20% higher than the average for 2021. This is due to price increases for entry-level printers in consumer and business segments, as a result of product shortages. It’s also the result of more sales of mid- and high-end business devices, especially among SMBs, due to offices reopening.

However, the UK and Spain are the only top European countries with upward trending revenues since Week 2. The sharp upward curve in recent weeks has seen both cross the index 100 baseline, and closely resembles last year’s performance in each market. It’s reasonable to assume that revenue in both countries will continue to trend above the 2021 average for the first half of 2022, boosted by business sales.

Pages printed declines

However, average number of pages printed (ANP) declined by 3% year-on-year in January. This figure is calculated from the yield of pages printed per cartridges/tanks and toners, and the units sold for these consumable products. The decline was mainly driven by the negative performance of toners, which dropped -3.3% year-on-year.

The performance of ink cartridges and ink tanks failed to compensate for this slump in toner ANP, recording about the same number of pages printed as a year ago. That’s despite the solid performance of ink tanks, which continue to gain market share over inkjet cartridges.

As of week 34, CONTEXT’s Revenue Trend Index for refillable ink-tank devices remained above 120, meaning that revenue is more than 20% higher than the average for 2019. This compares well with the performance of inkjet machines, for which the same measure stood below 80.

Ink-tank devices are refilled with ink supplied in bottles, and the tanks have a higher capacity than traditional cartridges. Although the printer hardware has a higher upfront cost, the price per page is significantly lower, making them more cost-effective. They therefore became an increasingly popular choice among consumers during the pandemic. In recent weeks, sales have also benefitted from stock levels that remain relatively good, unlike those of cartridge printers.

The recent performance of ink-tank printers has been particularly impressive in Germany, France and Italy, which together account for around 40% of European revenue from this type of device.

Consumer vs business

Business sales have rebounded after a tough year and revenue began to increase from around week 21, thanks to office re-openings and rebalanced budgets. However, it started to slide again in July and the holiday season exacerbated the trend.

The continuing shortage of components and raw materials means vendors will be seeking to make the best use of available components to optimise profits. They are thus likely to alter their mix of offerings toward products such as business printers that generate higher margins. A further incentive to shift production in this direction comes from increasing demand for business models as large private and public projects resume alongside new projects that will further stimulate sales in the segment.

Underperformance of the consumer market in Q2 2021 was also a consequence of the supply shortages. Shipments did increase towards the end of the quarter, meeting pent-up demand, and remained high in July. This, along with suppliers raising prices, led to the revenue index growing from week 22. However, revenues fell significantly again in August as demand dropped and the global component shortage left manufacturers competing for limited materials, with ink cartridges and inkjet printers particularly affected.

Raw material shortages and logistics challenges are forcing prices up and reducing revenues across the industry. Should the situation improve in September, it is not unreasonable to anticipate a rebound in sales – particularly those of entry- and mid-level devices aimed at consumers

London, 24 January 2022 – Revenue sales of enterprise servers through distribution slumped by -4.4% year-on-year (YoY) in 2021, but storage and networking performed well during the year despite a poor Q4 all-round, according to CONTEXT, the IT market intelligence company.

Unpredictable market conditions at the end of 2021 have made accurate forecasts extremely challenging.

The enterprise server market ended the year with a -15% YoY revenue decline, driven by product supply issues and the reintroduction of stricter COVID-19 measures and resulting business uncertainty. Decline for the year was less dramatic, but follows a -9% YoY drop in 2019 and a -15% slide the year after. This can be explained by longer term trends such as migration to hybrid cloud infrastructure and the increasingly software centric datacentre, which have hit on-premises server sales.

The tower form factor continues to decline, dropping from a market share of 31% in Q1 2021 to around 25% by Q4 in terms of volume. The COVID-driven move to hybrid working and long-term virtualisation trends can help explain this slump in popularity.

Storage ups and downs
Things in the enterprise storage market were more positive. Although YoY revenues sales declined by -4.2% versus Q4 2020, overall the category grew +4.6% for the year. Product supply challenges and COVID restrictions can again explain much of the Q4 drop, and the HCI segment in particular recorded poor performance of -13% across Europe. Revenue sales for arrays didn’t move in Q4, but grew 5.1% over the year while HCI sales grew 5.3% YoY in 2021.

Enterprise networking has solid 2021

CONTEXT forecasts for enterprise networking segment were rather optimistic. In the end it finished the year with a -0.5% YoY decline in Q4. Supply difficulties will persist throughout 2022, while the long-term trend towards hybrid working and reduction in office space will lower investments in switching infrastructure. However, Q4 2021 revenue was actually fairly high and only moved into negative territory due to comparatives with Q4 2020, when business investment was strong following the end of the first wave of COVID.

The segment as a whole also grew 5.9% in 2021 YoY including 5.2% in the UK. The latter market has been lagging the rest of Europe considerably through most of 2021, so its return to growth is good news.

Switching is the main culprit dragging down growth overall for the networking market. Its revenue sales declined -2.1% YoY in Q4, the category’s lowest performance of the year. At the other end, wireless continues to expand, with +5.7% YoY growth in Q4 and +13% overall for the year versus 2020. It’s up even more (17%) on 2019, which bodes well for the future.

London, 09 December 2021 – The European enterprise networking market has seen revenue sales exceed 2019 and 2020 figures for the past three weeks, although the server and storage categories have struggled, according to the latest data from CONTEXT, the IT market intelligence company.

The findings highlight an enterprise market far from uniform in recent revenue performance. Both storage and server sales have been affected by supply issues and component shortages, delaying projects and contributing to revenue sales below 2019 and 2020 levels over the past fortnight. Another driver is the emergence of hybrid working, which is leading many companies to reduce office space and could negatively impact on-premises server and storage sales long-term.

On the plus side, however, enterprise networking for the past three weeks has surpassed the performance of the previous two years. Although it was predicted to be the category most impacted by component shortages in Q4, vendors and suppliers are adapting remarkably well to supply challenges, by prioritising delivery of the right products to the right places.

Shortages driving prices up

That’s not to say the enterprise networking market has been immune to supply shortages. Our data for SMB switches shows the average selling price (ASP) per port climbing from €8.15 in January 2021 to €9.11 in October. These sorts of increases are not seen in the campus or datacentre switch markets, and are evidence of product shortages.

The same dynamic is true of the SMB Wireless Access Point segment, which saw ASPs rise from €108 in January 2021 to €128 in October, after peaking at €153 in September. Supply issues impacted the delivery of older Wi-Fi chipsets, which in turn drove up sales of Wi-Fi 6 appliances. Revenue share for Wi-Fi 6 among SMBs went from only 30% before the summer, to 60% in September.

Caution for the months ahead

Germany is driving solid growth for the enterprise IT market. The new government there has given a boost to infrastructure spending, combined with spending of the remainder of budget left from the previous administration. The main stand-out performer in the country is wireless, which in the past two weeks achieved its best revenue levels of the past two years. PC supply issues are also playing a role—with component shortages making it difficult to order some PC configurations in large quantities.

The UK has also recorded positive performance after lagging the European average for networking investments in 2021—especially in switching infrastructure. Revenue levels surpassed 2019 and 2020 figures in week 46, driven partly by the return to the office. However, we remain cautious about long-term sector performance given looming shortages and the possible return of lockdowns. Channel players will need to keep a close eye on developments over the coming weeks and months.

full content in research-updates/3d_printing page

full content in research-updates/3d_printing page