It has been another interesting month in the IT
channel. CONTEXT’s weekly webinar briefings continue to help our
partners and clients make sense of fast–evolving industry trends; and,
ultimately make better informed business decisions. Among our May
highlights are growth in the gaming space, optimism in Poland and new
sales figures for Q2 2024.
Here’s our pick:
Gaming notebooks and monitors show signs of strength
Q2 is often a subdued period of the year in
gaming, after the heights of Q4 and residual sales growth in Q1. Yet
there are some bright spots this year. Monitors started 2024
strongly and will likely continue to perform well throughout the
year. As of March, the segment remained above the Revenue Trend
Index baseline, which is calculated from 2023’s monthly revenue
average. Gaming notebooks also hovered above the baseline –
potentially indicating the start of a new refresh cycle. The UK and
France are leading the way in Europe.
Turnaround delayed by a quarter as business confidence returns
Following revenue sales growth figures of –6.5%
in Q1 2024, CONTEXT has downgraded its forecast for 2024. Our
previous estimate of 2.3% annual growth (with range of 6.5% to
–0.5%) is now revised to 0% with a forecast of –1.3% YoY negative
growth for Q2. The net result is that the much–anticipated market
turnaround will be delayed by a quarter – with Q3 forecast for 3.1%
YoY sales growth. However, things are moving in the right direction.
In the UK, consumer and business confidence has been on the up in
March and April, matched by signs of revival in Poland, France and Spain.
EU funds set to drive growth in Poland
Inflation is on the rise in Poland, going from 2%
in March to 2.4% in April, thanks in part to an increase in fuel
prices and higher VAT on food. It could reach as high as 5.5% by the
end of the year. However, there is much better news for the channel in
that the country received its first payment from the EU as part of the
National Reconstruction Plan – and we know that over a fifth of this
is going to be spent on digital transformation. This will include a
rural broadband rollout, more IT equipment for schools and new
government tenders across a range of tech including printers, PCs,
software and mobile devices. This is part of the reason why – despite
high comparative figures – CONTEXT is predicting a positive second
half of 2024.
Distribution bounces back in March
There are various routes to market for PCs and
notebooks. But the good news for distributors across Europe is that
revenue growth bounced back in March for the distribution sales
channel. Vendors favoured distributors to reach corporate and small
and medium resellers (SMRs). In the UK and Germany, distributors have
maintained a route–to–market share of over two–fifths in the last
twelve months, with Italy in the lead with 68% of business PC’s and
56% of consumer PC’s.
Indian tech markets grow as elections take place
Politics play an outsized role in the fortunes of
the IT channel. That means businesses are paying close attention to
the outcome of current elections in India – which are taking place
over a 45–day period. Against this backdrop, the economy is in good
health, with the fiscal deficit coming back under control at 5.8% of
GDP, and GDP growth upgraded by the IMF to 6.8% for the year.
Smartphone and AI manufacturers have the most to be proud of at
present. Q1 smartphone sales grew 18% in revenue and 8% in units YoY.
We also forecast that the market for AI could reach around $20bn by
2028, driven by demand from financial services, insurance, tech and pharma.
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