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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


Lockdowns hit sales but LFDs show their potential to contribute to pandemic recovery

London, 29 May 2020 – Sales of large-format displays (LFDs) were already being affected by the Covid-19 pandemic before a dramatic drop in early Q2 2020, according to the latest data published by CONTEXT, the IT market intelligence company. This decline reflected the effects of lockdown measures as these devices are heavily used in public settings. On the positive side, digital signage has the potential to support the safety-conscious ‘new normal’ in a range of spaces. If indications that the pandemic is now being brought under control are accurate, and if lockdowns can be released safely, it is reasonable to hope that the category will recover with renewed confidence in its ability to make a difference to business and wider society.

Imaging


Lockdown-linked consumer demand drives European inkjet printer sales

London, 29 May 2020 – A spike in consumer printer demand during Covid-19 lockdowns has helped overall sales through European distributors grow by 2.2% year-on-year in the first 18 weeks of 2020, according to CONTEXT, the IT market intelligence company.

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




Lockdowns hit sales but LFDs show their potential to contribute to pandemic recovery

London, 29 May 2020 – Sales of large-format displays (LFDs) were already being affected by the Covid-19 pandemic before a dramatic drop in early Q2 2020, according to the latest data published by CONTEXT, the IT market intelligence company. This decline reflected the effects of lockdown measures as these devices are heavily used in public settings. On the positive side, digital signage has the potential to support the safety-conscious ‘new normal’ in a range of spaces. If indications that the pandemic is now being brought under control are accurate, and if lockdowns can be released safely, it is reasonable to hope that the category will recover with renewed confidence in its ability to make a difference to business and wider society.

After a strong 2019, where sales growth was in double figures, there was significant slowdown in LFD sales over Q1 2020 with a total decline -1% year-on-year. This was due not only to the spread of Covid-19 in Europe but also to factory closures in Asia during the early days of the pandemic. That said, there was one sub-category which continued to do well in Q1: sales of interactive models, which are used for office collaboration and classroom teaching, were up by +14%. However, this too ended in early Q2 as widespread lockdowns across Western Europe (WE) led to a dramatic decline across the entire sector.

      Y/Y large format displays (LFD) volume growth: Western European distribution

 

Total sales of LFDs designed for digital signage, public information or collaboration declined by 46% year-on-year in the first five weeks of Q2 2020, affecting all vendors and almost every country in WE. It will take time for these losses to be recovered. Large-scale events have been postponed and demand for LFDs for indoor applications has fallen – we need desktop monitors, not boardroom screens, for school students and office workers now based at home. Transport, hospitality, and bricks-and-mortar retail – all important verticals for LFDs – have suffered. Fewer commuting office workers means a smaller audience on transport networks. Moreover, the future of the communal touchscreen is in question: except in a few specialist applications, convenience will not survive anxiety about hygiene and shared surfaces. It will be interesting to follow how vendors adapt and rise to the challenge of creating alternatives to touchscreens.

Despite the difficult environment, there are opportunities for the LFD industry as lockdowns gradually ease, societies begin to reopen, and the world finds out what the new normal will be. Digital signage can help public spaces adapt to the need for social distancing, thanks to its ability to convey clear messages at the same time as offering the options of personalisation and adaptability. Even where strict lockdowns remain, it can reach consumers in outdoor spaces used for exercise and support online sales while shops are still closed. As LFDs are set to help us reintroduce some of our day-to-day activities whilst enabling us to keep a safe distance, the sector has a good chance of making a full recovery – especially if current opportunities to innovate and contribute are fully realised.

 




Lockdown-linked consumer demand drives European inkjet printer sales

London, 29 May 2020 – A spike in consumer printer demand during Covid-19 lockdowns has helped overall sales through European distributors grow by 2.2% year-on-year in the first 18 weeks of 2020, according to CONTEXT, the IT market intelligence company.

      Graph 1: Printer volumes and Y/Y change by category – European distribution

The latest data indicates that, although not as essential to home working and studying as products like computers and headsets, printers became more popular in March and April as households began to see the value of having a device at a time of mass school and office closures.

Consumer unit sales across Europe spiked by 72% year-on-year in week 14 (ending April 5) and by 52% in week 12 (ending March 22).

However, although the etailer consumer and retail channels accelerated their purchasing in Q1 2020 due to concerns over supply instability, revenues fell by -10.6% year-on-year. This was due to falling ASPs and a greater focus on consumer products (cheaper entry-level and mid-range models) than in the same period last year.

In fact, consumer printers dominated the first 18 weeks of 2020, accounting for 64% of sales and growing by +11.7%, while unit sales in the business segment fell sharply at -14.4%.

Brother (+33%), Canon (+18%), HP (+17%) and Epson (+11%) saw significant year-on-year sales increases in the consumer space as a result, although most brands benefitted, while in the commercial space just four vendors saw double-digit growth: Brother (+17%), Canon (+16%), Xerox (+14%) and Epson (+10%).

             Graph 2: Y/Y change in printer sales by segment – European distribution

Inkjet MFPs and SFPs were the winners: European distributors sold more of these models in almost every single week than at the same time in 2019. A shortage of consumer printers also forced many buyers to purchase entry-spec business inkjet MFPs, driving up revenues.

Overall inkjet sales have risen 30% year-on-year due in part to ink-tank models that are appealing to consumers looking for more durable home essentials.

           Graph 3: Y/Y change in inkjet sales by function – European distribution

Laser printers have had a less successful year thus far, with neither the business nor the consumer segment matching 2019 performance. Overall sales during the first 18 weeks of 2020 were down by -7.2% year-on-year (and revenue by -17.5%), mainly due to falling business demand. However, sales of laser MFPs aimed at consumers grew by +29%, driven mainly by cheaper models of up to €150.

      Graph 4: Y/Y change in laser printer sales by function – European distribution

The story in each of the major Western European countries was slightly different, and it reflects differences in the timing and nature of measures implemented by Governments to control the spread of the virus. Only Spain recorded unit sales and revenue growth, with most countries showing declining revenues even as volume sales increased.

Table 1: Imaging units sold and revenue: Y/Y change For W1–W18 2020 – European distribution

Although there is no sign of recession, a prolonged lockdown across Europe could leave vendors and distributors with excess inventory, especially business laser printers.

 




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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