Research Updates

London, 05 May 2020 – Volume sales of PCs through Western Europe’s largest distributors increased by +17.5% year-on-year in the first quarter of 2020 as a surge in demand for remote-working equipment during the last month of the quarter pushed PC growth, according to the latest data published by CONTEXT, the IT market intelligence company.

PC sales increased by +7.6% in January, +13.2% in February and +31.8% in March, when stricter measures to contain the spread of coronavirus across Europe led to a dramatic rise in remote working.

Over the full quarter, the increase was greater for business-targeted products: sales of these were up by +22.8% year-on-year compared to +9.4% for consumer-targeted PCs. The most sought-after devices were notebooks – up +18.4%, as a +23.6% rise in the commercial category was supported by a +12.3% increase for consumer systems. Desktop sales were up by +15.3% overall with a +22.7% growth in sales of business-targeted devices more than compensating for a fall of -2.7% in consumer sales.

The unexpected surge in demand for devices suitable for home working seen in March has led to a significant reduction in notebook stock across most Western European countries. With incoming supply also disrupted by manufacturing and logistics issues, distributors have been using existing – and often even ageing – stock to fulfill orders and have reported a growing order backlog. Consequently, while the March spike in demand is likely to soften, sell-through during April is set to stay healthy as the channel works on reducing this backlog.

The impact of the current crisis on PC demand throughout the rest of the year will depend on the duration of lockdown measures and the effect these have on European economies. Longer term, the crisis is likely to accelerate digitalisation efforts across a number of sectors now that, for many organisations, the ability to provide a secure infrastructure for remote working is no longer a “nice-to-have” but an economic necessity.

                            Y/Y PC volume growth: Western European distribution

                                  PC sales: Western European distribution

London, 30 March 2020 – Volume sales of PCs through Western Europe’s largest distributors increased by +38% year-on-year in the first three weeks of March as the accelerating spread of coronavirus produced a surge in sales of remote-working devices, according to the latest data published by CONTEXT, the IT market intelligence company.

As the crisis across Europe worsened, and countries took successively stricter measures to contain the spread of the virus, the resulting demand for home-office equipment led to a +51% year-on-year growth in sales of notebooks and a +9% rise in those of desktops.  The increase was greater for business-targeted products: commercial notebook sales were up by +56% compared to +44% for consumer-targeted products while, for desktops, there was year-on-year growth (of +16%) only in the business-targeted segment.

Looking at the top Western European markets, the growth in notebook sales was led by Italy, the European country first hit by the outbreak and the first to introduce strict measures to slow down the spread: Italian distributors saw notebook sales increase by +110% in the first three weeks of March. Spain was next with a growth rate of +87%, followed by Germany (+52%), the UK (+50%) and France (+5%).

The surge in demand for home-working devices over the past couple of weeks has led to a significant reduction in notebook stock in a number of Western European countries. With incoming supply also disrupted to varying degrees (depending on the OEM and product category) by manufacturing and logistics issues, providing PCs for the rising number of home workers could turn into a challenge over the next few weeks.

The present exceptionally strong growth rates are related to the sudden need to migrate employees to home-working and are expected to be temporary. Nevertheless, in many organisations, the current crisis is likely to have raised awareness of the economic necessity of providing sound digital solutions, and this is expected to result in increased investment in this area over the longer term.

                            Y/Y PC volume growth: Western European distribution

                        Commercial PC volume sales: Western European distribution

London, 5 March 2020 – The business market drove growth of revenues from desktop monitors in 2019 and has continued to do so in January 2020: revenues from business-targeted monitors grew by +7% year-on-year while those of consumer-targeted monitors were up by +1% according to the latest data published by CONTEXT, the IT market intelligence company.

For many vendors, 2019 was a very successful year in terms of desktop monitor sales. As 2020 begins, distributors are seeing consistent growth in demand for business-targeted monitors with sales up +4% year-on-year in January. And, even though this is less than the growth seen in the consumer market (+6%), it is coming from a very strong baseline: in January 2019 sales of business-oriented monitors grew by +12%. Along with greater demand, increased sales in higher price ranges (particularly in the €200–€300 category) have helped to drive revenues in the business segment to +7% year-on-year. Sales of consumer monitors were driven by those in lower price ranges (€100–€150), so revenues here were up by only +1%.

The increased sales of more expensive business monitors were spread across most distribution channels, and sales to corporate resellers grew by over 50%. This was driven by demand for 23.8", 27" and 29" models and those with USB-C ports – 60% of monitors in the €200–€300 price bracket sold to this channel offered this type of connection.

Desktop monitors: Business-targeted models in price range €200-€300, WE distribution.

Initially, after many quarters of growth in Western Europe, sales of desktop monitors were expected to slow down in 2020 with a modest growth in the first half of the year, continuing to benefit from PC refreshes as businesses that have delayed the implementation of Windows 10 make the transition. However, the recent coronavirus outbreak could change that scenario. While vendors may have already secured supplies of panels and other components for Q1, the impact of factory closures and production delays could be felt as early as Q2. The resultant product shortages in Q2 could lead to a pick-up in demand in the Q3 and price rises that have the potential to make H2 the stronger part of the year.

Despite production turbulence, vendors are aiming to keep revenues high by launching more innovative models and creating their own high-margin niches by focussing on, for example, models with high-resolution or refresh rates, improved ergonomics or touchscreens, or aiming models with advanced graphics capabilities at not just gamers but also users of other specialised applications.

London, 05 February 2020 – The steady change in retail, workspace and classroom environments that is driven by the need to improve customer service or/and collaboration efficiency has resulted in another positive quarter for sales of large format displays (LFDs) through distributors in Western Europe (WE). The latest results from an impressive 2019 show fourth-quarter growth of +13% year-on-year for the category, according to the latest data published by CONTEXT, the IT market intelligence company.

                            Large format display sales: WE distribution

The period was particularly strong for displays that enable interactivity and collaboration: sales of these were up by over 30% in Q4 2019. Although prices continue to decline, as a result of increasing competition between vendors trying to meet customer needs, LFDs continue to offer vendors, distributors and resellers greater value than displays sold in higher volumes. The ongoing introduction of new technologies and solutions (which lead in turn to yet more new applications) has helped revenues climb higher and higher – by almost +40% year-on-year in Q4 2019. Most countries in WE registered double-digit growth for these interactive solutions during 2019, and increasing demand in Spain led to a doubling of sales. Even so, the UK remains the biggest market for LFDs.

The dominant screen size is still 55" and this is used not only for standalone signage but also for videowalls. However, there is interest in smaller sizes, too: in Q4 2019, sales of 49" videowall panels grew by over +130% year-on-year and their average selling price (ASP) fell to about €1400 – almost 40% less than the ASP of 55" panels sold by WE distributors. As the cost of interactive displays with new technologies drops, there is a growing market for even larger screens, and sales of 84"+ displays grew by over +45% in the last quarter of 2019.

Another growth area in WE distribution is premium displays with a high level of brightness (500 nit and above) that enable uninterrupted 24/7 content delivery. In Q4 2019 these accounted for 25% of standalone signage revenues and their sales grew by +28% year-on-year with those of the highest brightness (1000 nit and above) performing particularly well. The leaders in this field are Samsung and Sony followed by LG, NEC and DynaScan. Although Sony saw a drop in sales, all the others registered double-digit growth over the quarter.

                               Large format display ASPs: WE distribution

LFDs have been around for some time now but, as sales are expected to continue growing, they remain a hot product for marketers and vendors. This is a result of the continuous evolution of digital signs and their applications in response to new technologies that seem to appear almost every day: screens are no longer just filling up otherwise blank walls but becoming integral parts of a space. Moreover, rapidly developing signage-as-a-service offers will enable businesses to upgrade quickly by investing in digital signage without having to take full and ongoing responsibility for display maintenance and content management.

London, 11 September 2019 – The start of Q3 2019 saw printer sales continue to follow the pattern that has characterised the past few quarters, with healthy demand from consumer and business laser multifunction printers (MFPs), according to the latest distribution data published by CONTEXT, the IT market intelligence company.

However, volume sales of printers through West Europe’s largest distributors were down by -4.4% year-on-year in July 2019. The sharp growth of +9.1% in sales of laser MFPs (mainly driven by the exceptional growth of +30% Y/Y in the consumer segment during early Q3), was offset by the sharp decline of inkjet devices (SFPs -15.5% and MFPs -6.4%) and laser SFPs (-6.9%). With distributors reporting that reseller demand for SFPs, particularly lower-spec models, is low, the ongoing shift from single- to multifunction devices is likely to be further consolidated.

Business laser MFPs, which account for 73% of sales and 89% of revenue, registered a small year-on-year volume growth of +2.9% in July 2019, leading to an increase in revenue of +9.3% and reversing the negative trend the market saw in 2018 and 2019.

Sales of, and revenues from, laser MFPs increased in almost all WE countries in July 2019. In Italy, overall printer sales continued to grow in terms of both units and revenues (+14% and +28% year-on-year respectively) with most retailers and small resellers buying from distributors thanks to their ability to offer credit lines and smaller minimum order sizes. Vendors are also benefiting from this shift which transfers financial risk to the distribution channel. However, the question now is how much distributors will ask from vendors to compensate for the higher risk they are taking.

The United Kingdom also registered strong year-on-year growth in sales of laser MFPs in July 2019, in terms of both units (+12%) and revenues (+11%), driven by the business segment (+9.2%) which accounts for 87% of laser MFP sales (96.4% in terms of revenue) in the country. Consumer laser MFPs registered outstanding growth (sales up by +33% and revenue +31%) but they only account for 13% of sales and 3.6% of revenue.

It is expected that both consumer and business demand for laser MFPs will remain strong throughout the second half of 2019 as new products become available. Lexmark, for example, is to roll out a much-needed revamp of its colour laser printers: its GO Line of more compact and faster SFPs and MFPs aimed at small and medium businesses will be available worldwide by mid-September.

While a range of promotional activities during the upcoming back-to-school and Black Friday periods are likely to lead consumer sales for the rest of the year, overall printer demand is expected to remain soft.

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

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

London, 17 May 2019 - Printer markets have become increasingly healthy over the recent years and are currently robust, although, as always, they remain competitive. However, sales of printer hardware through distributors in West Europe (WE) were sharply down by -4.2% year-on-year in Q1 2019, according to the latest distribution data published by CONTEXT, the technology market intelligence company. This is not a surprise: the first quarter is, historically, the weakest of the year – and it is usually followed by a weak second quarter.

Sales of multifunction printers (MFPs) were down by -1.7% year-on-year: even though laser MFPs saw a sharp growth of +4.6%, this was offset by the negative performance (-3.4%) of inkjet MFPs which account for almost 78% of sales in WE.

Sales of single-function printers (SFPs) registered a strong decline (-13.6%) and contributed to the overall negative performance in Q1 2019. The ongoing shift from single- to multifunction devices is likely to be further consolidated with distributors reporting that reseller demand for SFPs, particularly lower-spec models, is low.

Laser MFPs saw growth of +4.6% in Q1 2019, driven by the exceptional performance of consumer-targeted devices (sales up by +80%), especially monochrome printers (sales up by +113.1%), which is primarily due to falling ASPs as distributors use promotions and discounts to clear stock and get ready for the arrival of new models.

Consumer printers as a whole steadily increased their market share and drove overall imaging growth in Q1 2019, as they had done in 2018. Sales of business-targeted models, which account for 83% of laser MFP sales and 92.8% of revenue, dropped by -13.4% (leading to a fall in revenue of - 5.5%), mainly because the ASP is continuing to increase. This suggests companies (small and medium businesses) are replacing entry-level business-targeted models with mid- and high-level consumer- targeted devices.

Inkjet MFPs reversed the positive trend seen in 2018 with volume sales declining by -3.4% in Q1 2019. However, revenues were up by +2.3%, helped by increased sales in mid- and high-price ranges and driven by sales of monochrome and A3 devices, which saw revenue growth of +60% and +20.7% on the previous year. It is interesting to note the exceptional growth of A3 printer sales in the consumer segment (+145.4%) – another factor suggesting that SMBs are buying consumer inkjet devices with greater functionality to fulfil their commercial needs.

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

Imaging sales and revenues declined in almost all WE countries in Q1 2019. Italy was the only top 5 WE country which continued to register a positive year-on-year performance in terms of both units and revenues. The increase there was driven by strong consumer sales from HP (sales up by +62%), Brother (+38%), Samsung (+15.6%) and Ricoh (+15.5%), which share 69.9% of the country’s printer market.

Spain also saw growth of both units and revenues in Q1 2019, reversing the negative trend of 2018.This positive performance was driven by mid-range and high-range consumer devices, and by brands such as Kyocera (sales up by +149.3%) and Epson (+11%), even though these have a combined market share of only just over 22%.

In the United Kingdom, where consumer confidence is low amidst Brexit-related uncertainty, last year’s positive trend was reversed and sales (units and revenues) declined in Q1 2019. There were falls in both consumer and business segments, and significant drops for brands such as Ricoh (year-on-year sales down by -90.5%), OKI (-36.8%), Epson (-34.3%), Lexmark (-9.9%), Canon (-9.1%), Xerox (-4.9%) and Brother (-3.5%), although other companies, which share 59.4% of the country’s printer market, saw smaller declines.

Germany and France continued to register negative year-on-year changes in volume sales and revenues, with strong falls in both consumer and business segments. This had an effect on all the brands which share over 94% of the printer market in these countries: Ricoh saw volume sales decrease (by -39.8%), as did Samsung (-33%), OKI (-31.4%), Kyocera (-16.7%), Epson (-15.4%), HP (-12.7%), Lexmark (-8%), Brother (-5.8%) and Canon (-3.7%).

     Graph - Y/Y change in imaging units sold through distributors – Top 5 WE countries

Table - Y/Y change in imaging units sold and revenue – WE distribution, Q1 2019

Looking ahead, the market is likely to see other changes alongside the ongoing shift from single-function to multifunction printers.

Managed print services (MPSs) that allow customers to transform their workplaces from paper to digital will continue to expand in 2019 as distributors and retailers use their partnerships with vendors to provide comprehensive, cloud-based MPS solutions to consolidate workplace printing. The emergence of enterprise Internet of Things (IoT) platforms offering asset management, fault detection, smart analytics and remote monitoring presents a broader opportunity for MPS providers to participate.

Over the next one or two years, we expect to see relatively fast growth in sales of production-standard inkjets, wide-format printers (both digital and inkjet), and digital toner-based devices. However, the five-specific print-market segments that are likely grow at a relatively higher rate are packaging and specialty packaging, labels and wrappers, signage, direct mail and point-of-purchase.

London, 11 February 2020 – The adoption of SSDs for primary storage accelerated during the fourth quarter of 2019 as the volume of HDD PCs – notebooks, desktops and workstations – sold through the Western Europe (WE) IT distribution channel fell to 9.4%, according to the latest data published by CONTEXT, the IT market intelligence company.

                       WE PC market share by primary storage type: all PCs

As expected, 93.3% of new laptop PCs sold in Q4 2019 had SSDs as their primary storage component, up from 66.7% at the end of 2017.

                         WE PC market share by primary storage type: laptop PCs

More surprisingly, SSDs are also increasingly being used in desktops with the proportion of new devices using them reaching 82% at the end of 2019, up from 48.5% in 2017.

                     WE PC market share by primary storage type: desktop PCs

The adoption of SSDs is fastest in Nordics and The Netherlands which had an almost HDD-less PC market by the end of 2019 with the components used in only around 2% of PCs, inclusive of laptop and desktop. Germany follows – there, SSD share of the overall PC market is 93.4% – and the UK completes the podium with only 9.9% of PCs sold in the country in Q4 2019 containing HDDs. The transition is slower in Southern Europe where an average of 85% of PCs sold at the end of 2019 came with SSDs.

The sharp fall in price per gigabyte observed in 2019 is the main driver of accelerating SSD adoption as it enables vendors to sell SSD configurations at competitive prices. Meanwhile, online storage services are getting cheaper, and the use of streaming online services more common, so there is less need for high-capacity local storage. Vendors can therefore sell models with less storage and this, too, is supporting the transition towards SSDs. And, last but not least, the majority of consumers have now experienced the advantages that SSDs bring to day-to-day computer use so are happy to pay a little more for a machine with this type of storage.

Given these trends, it is pretty safe to say that, by the end of 2020, no new laptop sold in WE will have HDD as the primary storage component – and there’s not much doubt the desktop segment will follow closely in 2021.

London, 22 January 2020 – Despite a slowdown in wireless access point (WAP) sales in Q4 2019, adoption of the Wi-Fi 6 standard is pushing up revenues in the Western Europe (WE) IT distribution channel as its market share increases, according to the latest data published by CONTEXT, the IT market intelligence company.

                                                    WAP revenue: WE

                                                      WAP units: WE

As shown in the two graphs above, WAP revenues in the final quarter of 2019 were almost flat – only -0.9% down on the previous year – while there was a -4.5% year-on-year decline in WAP units sold; this hints at an increase in average selling prices.

                          Q4 2019 WAP unit and revenue growth: Top 5 WE countries

Of the Top 5 WE economies, the UK saw the greatest revenue growth in Q4 2019 with a +9.5% year-on-year increase even while units fell by -10.2%.

                                                    WAP revenues by Wi-Fi type

                                                      WAP units by Wifi type

The main factor driving growth in Q4 was the increasing sales of Wi-Fi 6 access points, which now account for 18% of WAP revenues and 12% units sold, showing that adoption of the latest Wi-Fi standard is gathering pace.

                                  Wi-Fi 6 WAP revenue: country share of market

It is in the UK that the adoption of the new standard is currently most important with the country being responsible for 32% of WE Wi-Fi 6 revenues in Q4 2019; Germany follows, generating 21% of revenues, then the Nordic countries with 18%. As often happens, Northern Europe is at the forefront when it comes to implementing new technology while Spain and Italy lag behind.

As Wi-Fi 6 adoption is a planned change, there is nothing really surprising about these trends; the growth of the new standard will continue throughout 2020, reaching a market share of over 50% towards the second half of the year. The relative slowdown in WAP sales is more interesting. We think this trend will continue – Wi-Fi coverage in WE has definitely reached a tipping point. With those locations where it is still not available being too costly to cover, the future could instead lie in 5G networks: TIM’s latest tests in Italy have demonstrated particularly impressive 5G bandwidths of more than 2Gbps. The possible impact on WAP sales of the extension of 5G network coverage could well make 2020 a challenging year for wireless networking vendors, especially if businesses opt to rely on 5G networks in some cases rather than Wi-Fi networks.

London, 13 February 2020 –The Industrial/Professional printer market (that is, for all printers above $5,000), has seen a +8% rise in polymer material utilisation over the last twelve months. Within polymers, photopolymers have seen the most significant near-term growth with volume used and revenues generated from use both seeing growth of +21% over the trailing twelve months (TTM) through to Q3 2019. For thermoplastics, although the overall increase in utilisation was up only +6% for the period, the powder-based side of this market saw good growth thanks mostly to a rising installed base of HP multi-jet fusion machines across the globe.

Charts 1 and 2: Global material utilisation by Industrial/Professional printers Trailing-Twelve-Months (TTM)

For Photopolymers, while there is an underlying increase in material utilisation as the market shifts from one principally focused on prototyping to one where mass production is also a key usage, near-term increases in material sales were more the result of a growing base of installed printers for traditional 3D printing uses. One such market which has traditionally embraced 3D printing for its unique ability of mass customization (that is, tweaks to each individual product manufactured) is dentistry. Photopolymer utilisation for this historically strong dental sub-sectors was particularly strong in the TTM to the end of Q3 2019, seeing a +29% increase in throughput. Increased photopolymer utilisation was also supported just in general by the accelerating installation of vat photopolymerisation printers in the TTM to Q3 2019 which were up +28% from a year before.  Strong sales of all price-classes* of Industrial/Professional stereolithography printers from the likes of 3D Systems, EnvisionTEC, UnionTech and Carbon were seen, helping to grow the installed base. Overall shipments of stereolithography printers – laser based, LCD, DLS/CLIP and especially those leveraging DLP engines – outpaced the retirement rate of legacy printers in the field, leading to a larger operational base of Industrial/Professional printers which resulted in accelerated material usage.

Chart 3: Global Industrial/Professional printers installed by primary material/process

The thermoplastics market is even larger than the Industrial/Professional photopolymer market. This part of the 3D printing polymers space is dominated by material extrusion machines but recent growth in material utilisation is linked to powder bed fusion (PBF) technologies. The period Q4 2018 to Q3 2019 saw a huge increase of +41% in the number of polymer PBF printers installed, driven by growing sales of HP’s Multi Jet Fusion technology. HP offers both Industrial* price-class printers, for mass production, and Design* price-class printers, mainly for more typical 3D printing applications like prototyping and short-run production.

* 3D printer segment by price class: INDUSTRIAL ≥ $100K, DESIGN = $20K–$100K, PROFESSIONAL = $2.5K–$20K, PERSONAL ≤ $2.5K (excludes do-it-yourself DIY kit printers)

London, 16 January 2020 – Shipments of Industrial* 3D printers priced at $100K+ were up by +8% in Q3 2019 compared to the same period the previous year. This key sector – which accounted for almost 70% of all 3D printer revenues for the period – saw even more impressive shipment growth of +12% on a trailing twelve month (TTM) basis. The increase came as a surprise given the headwinds many vendors reported in the second half of the year: reduced demand from the struggling automotive sector, sluggish European economies and a generally weak global industrial manufacturing market all impacted the bottom line of many companies in the third quarter.

In the Industrial polymer 3D printer market, HP (now #2 in global shipments) saw excellent growth, shipping +347% more printers in Q3 2019 than in Q3 2018 as it continued to roll out its more affordable colour-capable units as well as began to ship the newest iteration of its most advanced, highest-end, production-focused models in volume. The Chinese domestic market also grew, mostly thanks to leading Chinese vendor UnionTech.

While Industrial metal printers made up just 32% of unit shipments in the class over this period, they accounted for just over 51% of revenues; metal 3D printing is one of the fastest growing additive manufacturing segments and has seen shipments grow at an average rate of +30% over the last two years. However, the dominant technology – powder bed fusion – began to struggle in the second half of 2019. In the third quarter, -19% fewer metal powder bed fusion 3D printers shipped than in the same quarter the previous year, with market leaders EOS and GE Additive both seeing weaker shipments not only for the quarter but for the trailing 12-months as well. Even so, aggregated shipments of metal 3D printers grew by +11% as a different technology began to take centre stage, driven by Desktop Metal and Markforged. The new crop of material extrusion metal 3D Printers – which saw year-on-year shipment increases of +43% – addresses new markets for prototyping and entry-level metal printing. Since many of these markets are outside the aerospace, automotive and medical sectors that currently use powder bed fusion machines, the growth in shipments of extrusion models was not related to the decline in those of the other type of machine.

Chart 1: Global Industrial price class 3D printer shipments and growth by material

There was good growth in North America and China during Q3 2019, where year-on-year increases in Industrial 3D printer shipments were +22% and +36% respectively, while the global #2 market, Western Europe, saw shipments fall by -28%. Sales in this sector of the market tend to be more provincial than in other industries: there is less East–West trade because of logistics (most Industrial printers are very large and very heavy) and because of less-than-favourable global trade conditions which make it difficult for emerging technologies like 3D printing to flourish. These trends held true in the third quarter when Chinese vendors flourished in domestic China while US and European vendors again saw most of their business come from the West.

Other printer classes

Of the three other major price classes for finished-good printers - Personal, Professional and Design – shipments of printers in the Professional class were most notable. Printer shipments in the third quarter in the Design segment was largely flat and shipments of Personal class printers continued to struggle, losing ground to kit-based solutions like those from China's Creality3D. The Professional segment continued to shine however, growing by an excellent +21% on the previous year and a solid +17% on a TTM basis. Many vendors who formerly focused on the yet-to-explode consumer market have shifted their product lines to move into this price class. Especially noteworthy in the Professional class in the quarter was the performance of Formlabs which finally began shipping new models in volume against strong pent-up demand and surged to the top of the market in this class as the availability of their new products was bolstered by glowing reviews.

Chart 2: Global 3D printer unit shipments and TTM growth by price class (note two scales)

Many forecasts for Q4 2019 and on into 2020 turned a bit cautious toward the year end due, in part, to weaker demand from key geographies, to softening orders from key vertical markets, and to uncertainties associated with global trade. The period was also marked by significant managerial changes atop leading companies, also contributing to near-term uncertainty.

* 3D printer segment by price class: INDUSTRIAL ≥ $100K, DESIGN = $20K–$100K, PROFESSIONAL = $2.5K–$20K, PERSONAL ≤ $2.5K (excludes do-it-yourself DIY kit printers)