Category Archives: analytics

3D Printing – a year in review and a look at what’s ahead

2018 was all about the Industrial side of Additive Manufacturing. On the metals side, the industry saw shipments of new, lower priced multi-ASTM process printer technologies like Material Extrusion solutions from Markforged and Desktop Metal. Interest also gathered around forthcoming alternative multi-process metal technologies like the various Binder Jetting solutions from HP (Metal Jet) and Desktop Metal and for Stratasys’ LPM. “Green part” was indeed the phrase-du-jour at many a trade event this year as metal printer vendors explained the steps by which they envision lower priced metal parts being cost effectively mass produced in the not too distant future. Continue reading

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Trump’s tariff war – the challenge for IT procurement departments

As the tech world prepares to take on the threat of an increase in US tariffs from 1st January 2019, we look at how the procurement function deals with macro-economic events which impact the cost of IT products. 7 years ago it was the Thai floods which caused a worldwide shortage of hard drives. The Thai market was the second largest producer of hard drives after China, and the floods impacted the supply of 30% of global production. The result was a large hike in prices, and delays in the production of PC’s. It was not all necessarily bad news for the manufacturers who were able to reset expectations and raise prices in a competitive market. But how do procurement departments navigate in a time of increasing IT product costs and how they can assess how real and long-lasting these changes are?

There is no shortage of such issues. Currently there is a shortage of Intel processors due to unexpected growth in the PC industry, according to Intel CEO, Bob Swann. For the earlier part of this year, (as can be seen on the graph showing ASP’s) the cost of RAM has increased significantly due to shortage of supply only stabilising in recent months.

RAM

Source: CONTEXT SalesWatch Distribution – Europe + Russia + Turkey

And last year there was a large increase in the price of graphic cards due to the increase in gaming PC sales and the use of graphics cards in bitcoin mining in Russia.

ASP

Source: CONTEXT SalesWatch Distribution – Europe + Russia + Turkey

In each of these cases the root of the price increase was a shortage of components. So the parallel with the threat of tariffs is very relevant, as the major impact of the currently announced tariffs is on components and raw materials – leather (the new HP Spectre Folio), glass envelopes and fans used in computers, screws, stainless steel, printed circuit assemblies, certain monitors, and, the item which has caused Cisco and Juniper to increase their prices, switching and routing apparatus. What no procurement department wants to hear the IT vendor say is “Sorry, the tariffs are causing increases in the cost of components which means we have to put the price up by 10%”.

So, we expect that there will be standoffs and all parties will try to work round these issues.

  • IT manufacturers will get creative in the coming months to plan as effectively as possible for the next round of tariffs and return to practices from another age which in an era of ever increasing free-trade may have been forgotten. Tariff engineering is one such term – the “adapting of an item [being imported] so that [the importer doesn’t] have to pay any levy.” Is this the time to engineer out the need for fans in a computer and to find another way of achieving the same goal?
  • Switching the place where a product is manufactured may also be a choice, but this needs long-term planning, and in all likelihood, the endgame of President Trump is not to create a long-term trade war but to get a new deal with China on their level of imports from the US, and with Mexico and Europe for revised car trading deals. Apple is one of the companies potentially under threat as 100% of their smartphone production is based in China. So far, through successful lobbying they managed to get the Apple Watch out of the first wave of tariffs. But will they be as successful with the second wave in January 2019 or will they have to consider relocating smartphone production?
  • IT procurement departments will be pushing for more and more visibility into underlying component costs. This will involve both open book cost visibility of vendors sharing their own procurement data, as well as recourse to 3rd parties who provide independent verification of price indices.
  • IT procurement will also want to track closely the impact of price movements over time – increases do not flow through the supply chain immediately whilst there is inventory at the old prices. Visibility into the supply chain is vital from sell-in to distribution (for those products which go through the channel) and then to end-user. When new prices flow through, the impact should be clearly identifiable at each stage. Then in the case of tariffs, which are likely to be short-lived, transparency about the removal of the price constraint is necessary for procurement.

One of the unintended consequences of the Trump tariff war, may be a greater collaboration and transparency between procurement departments and the manufacturers of IT products, and a consequent increase in efficiency.

by MK

For more insights, please join our webinar on the 6th December, titled Technology and the trade war – navigating your way through the tariffs

webinar

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The trends behind the headlines: register for the CONTEXT autumn webinars

IT channel businesses thrive on data. Whether you’re a reseller, a vendor or a distributor, only market data of the highest quality and accuracy will do when making those crucial business decisions. That’s why CONTEXT has become an essential partner for the channel over the past three decades. Our latest ChannelWatch Report offers unrivalled insight into key market trends and channel priorities — compiled from interviews with over 7,000 resellers across 14 countries worldwide.

Sometimes stories in the trade media are written more to generate clicks than provide considered market insight. So if you want the truth behind the headlines, register for our upcoming autumn webinar series. We’ll be offering a comprehensive review of the year from a reseller perspective, insight into emerging categories, and a discussion of how data analytics can provide much-needed visibility into the impact of the US-China trade dispute. Continue reading

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Industrial-class 3D-printer shipments up in H1 2018

On the heels of one of the largest general manufacturing shows in the world – September’s IMTS in Chicago – the Industrial 3D-printer market finds itself on a good footing with shipments during the first half of the year up +22%. Shipments of Industrial-class 3D printers which produce plastic/polymer components were +18% higher than a year ago, while those of Industrial metal 3D printers were up +30% year-on-year.

Polymer-based 3D printers accounted for 68% of all Industrial printers shipped during the first half of 2018, and the ongoing rise of shipments from HP and Carbon more than took up the slack from Stratasys which, although it remains the industry leader, continued to struggle. While Q2 was fantastic for 3D Systems, the leading publicly traded company in this market, most of its growth came from shipments of Design and Professional printers. The company began shipping new products – including the much-anticipated Figure 4 systems – in Q3, so the second half of the year is expected to be strong. While most companies focused shipments on North America and Western Europe, UnionTech remained solid largely because of its focus on China.

While Industrial-class models are not the only 3D printers on the market, this segment’s shipments represented 70% of total printer revenues in H1 2018. The Industrial class of 3D printers is currently the most closely monitored, due to its ability to disrupt the $12T global manufacturing industry.

by CC

 

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Analytics beyond the “one” 3D Printer market

There’s a certain amount of buzz around 3D printers again at the moment, and with some justification. The global market reached $5.6bn in 2017, an increase of 16% from the previous year with the market now seeing household company names like HP and GE driving sales, competition and innovation. But what is the next major step for this technology and for its paradigm-changing potential? Is the much-touted move into mass production a reality yet, or is it a classic example of hype and speculation masking reality? Continue reading

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