As we approach the fourth quarter, we are refining our forecast for the second half of the year. In CONTEXT’s weekly webinar briefings, we share key data and trends to support data–driven decision–making, tracking European distribution sales results week by week. Among this month’s highlights are the latest growth predictions for 2024, an improving outlook for South Africa, a rebound in German consumable sales, and the emergence of new AI chips.

Here’s a closer look at our top stories:

IT Channel at Pessimistic End of Growth Estimates for 2024

At the beginning of 2024, CONTEXT’s central forecast for full–year revenue sales growth was 2.3% (±3%), which we then revised down to flat growth in May. Although Q2 performed better than expected, with 2.1% year–on–year (YoY) growth following four consecutive quarters of negative growth, our central estimate for the year remains modest at 0.3%. That said, the upcoming quarters are expected to post improved revenue growth due to favourable year–on–year comparisons. We anticipate 1.8% YoY growth in Q3, followed by 3.6%, 4.8%, and 4.7% in the subsequent quarters. The personal systems and software categories are leading the way, while networking is dragging overall figures down following a strong 2023.

South African IT Distribution Sales Near 2023 Levels

It has been a challenging start to the year for IT distribution sales in South Africa, but the situation is improving. According to the CONTEXT Weekly Revenue Trend Index, sales are approaching the 2023 average, represented by the index baseline, thanks to significant public and private sector tenders. Both consumer and business channels were nearly at the 100 baseline in Q2. Only two categories, networking systems and servers, did not show an upward trend during the quarter. In disk storage, a large deal pushed revenue sales growth to 180 on the index. Looking ahead, we believe AI, IoT, and edge computing will drive future growth in servers and networking.

Consumables Update: Germany Rebounds as Ink Bottle Sales Surge

As of Week 32, Germany stood out in the ink cartridges and bottles market, with sales growth nearing the baseline of the Revenue Trend Index. This improvement is mainly due to consumer demand. In fact, when considering consumer sales alone, Germany recorded growth of 120 on the index around Week 32, driven by back–to–school purchases. Ink bottles are performing well overall, staying above the trend line, while cartridges remain significantly below. Although ink bottle sales tend to be cyclical and country–specific, they have stayed above 2023 levels for the pan–European panel so far this year. When it comes to toners, Germany is also leading, fuelled by demand from low–end consumer and SOHO laser printer customers.

In Week 33, AI–Capable Notebooks Comprised 25% of Total Units Across Europe

As of Week 33, AI–capable notebooks accounted for just over 25% of the market, up from 23% the previous week. However, this increase is mainly due to a decline in sales of non–AI–capable devices, which saw a sharp drop after peaking at the end of July. Sales of Copilot+ PCs have remained stable at around 2% of the market during Week 33, the same share they have held for the past 4–5 weeks. This has been driven by Qualcomm Snapdragon X processors, although this week saw the first sales of units equipped with AMD Ryzen AI 300 chips. It is expected that AI–capable notebook sales will gain momentum once there is more variety on the market and prices begin to decrease in the coming months.

In the meantime, stay up to date with the latest market intelligence for the IT channel by tuning into CONTEXT’s weekly IT Industry Forum webinars.