Category Archives: PCs

35 Years and counting… stories from the IT frontline

In this latest post, CEO and co-founder Jeremy Davies reflects on the IT infrastructure challenges during the first few years at CONTEXT.

One of the reasons why working at CONTEXT in the early days was exciting, was that our work combined the business side with deep interest in emerging PC technologies. Balancing budgets and wanting to keep ahead of the curve was both challenging and fun. Continue reading

Leave a comment

Filed under Company news, Connectivity, Enterprise IT, Market Analysis, PCs

35 Years and counting… stories from the IT frontline

To mark CONTEXT’s 35th year anniversary, co-founder and CEO Jeremy Davies reflects on the state of computing during the early days at CONTEXT.

Starting a small business means adapting your needs to serious budgetary constraints. You need that 20MB hard drive, but can you afford it?

Towards the end of the 1980’s, the PC revolution was in full swing, but computers were not cheap. IBM’s PC came in at around £3,000 in those days, equivalent to £6,300 in today’s value. Margins were high double digits compared to today’s meagre low single points. At one point it is said that UK Apple dealers were making so much money, the Cupertino company asked them to stop the ostentatious displays of wealth and invest in their businesses. Continue reading

Leave a comment

Filed under Company news, IT Distribution, IT Pricing, Market Analysis, PCs

Thoughts from DISTREE EMEA

This year there were 500+ participants in the flagship event, and the buzz was back. The focus was on new technology, and everyone attending the conference can feel good about where we are. No, it is no longer the A brands – that has been the case for a number of years. But we have to get over this – HP, Intel, Acer, Microsoft and others no longer support conferences as they did before – they focus more on the big international events.

But in a world where new technology is exploding with fast growth rates and boundless innovation, more than ever there is the need to bring people together so that people can sit down and meet the latest innovative brands. And that is where the DISTREE model works well, because of the scheduling of meetings which means that vendors know that, if they pay to come, they will get a minimum number of meetings. And we had many of the big players here this year – Tech Data, Ingram Micro, Also, Exertis, Cool Blue and Amazon, as well as dozens of other smaller distributors.


But it is not just about meetings, and that is where the interest of the event comes in. As Ilona Weiss, CEO of ABC Data put it in her blog after the event, it is the time to “pick up the rhythm of global markets and predict accurately the direction in which things are changing so that I can buy enough time for ABC Data to adjust its course.” This comes from the informal discussions with other tech leaders, and also the rich thought leadership on offer, with keynotes and workshops which illuminate and stretch people’s imagination.

This year CONTEXT organised an invitation only event for C Suite executives from selected distributors and other invited guests. The content was rich, and the tone was set by Patrice Arzillier, Managing Director of Exertis Continental Europe, and board member of Exertis plc. He opened up to a series of questions about Board investment decisions, their approach to acquisitions and the challenges they face.

The meeting was done under Chatham house rules in order to create the right ambiance for senior executive sharing, but with Patrice there was no need, as he launched into a frank and open dialogue with the other participants in the room. These times of exchange are vital for the health of the industry, and to give each other the chance to “adjust your course if necessary”. This discussion was enriched by the input from Peter Van den Berg, the head of the GTDC in Europe and a presentation from Michael White of Quadmark, showing the new financial drivers of distribution, emphasising the need to have different measures for different types of revenue stream, and to take into account all investments, not just working capital.

The other theme we covered was strategic collaboration, and the level of congruence between the presentations was remarkable – old style confrontational negotiations are out, and the smart money is on those who find strategic ways of collaborating. One of the speakers, Marcos Garcia Esteban, until recently Purchasing Director of Worten (the Portuguese/Spanish tech retailer), spoke of high-level contacts between retailer and brand to find innovative ways of delivering product. Distributors are the “midfield” players, he said, and can bring everyone together in the new technology ecosystem.

Adam Williams, who has spent the last 6 months bringing a smart home product to market, laid out the complexity of the new emerging technology market and echoed Marcos, saying that distributors are the best placed to act as brokers between the various parties. Lastly Alan Clayton, a mentor at the Investment fund SOSV, one of the largest providers of seed capital to technology start-ups, spoke of the role he saw distributors playing in bringing products to market. “I need someone who, as a one-stop shop, can broker space in the top retailers in Europe.” His final call to action was memorable, for distributors to become “Co-creators of global brands.” A great and positive thought to keep distributors going forward in the right direction.

by AS

Leave a comment

Filed under Enterprise IT, IT Distribution, Market Analysis, PCs, Retail, Supply Chain

35 Years and counting… stories from the IT frontline

To mark CONTEXT’s 35th year anniversary, co-founder and CEO Jeremy Davies reflects on the early days of the IT industry and the beginnings of CONTEXT.

It’s now 35 years since CONTEXT began tracking the IT business. That’s quite a thought in itself. The fact that we have been able to create a business from scratch and – despite all odds – still be here, thriving, 35 years later.

But what’s even more stunning is to have been a witness to the changes that have taken place since those pioneer PC days. And what has kept us in business has been that change: not only have we watched it but we lived it, taking an active part as a small and growing business, embracing the latest technology as it unfurled and integrating the new as we built the platforms and processes needed to track the burgeoning IT industry.

So, a few facts to illustrate. In the 1980’s, magazines were king. Vendors advertised in Magazinemagazines, prices, specifications and even dealer lists. To track prices, one had to track magazines. This intensely manual job resulted in output that every month saw huge physical printed files sent out to subscribing customers. If you wanted to know specs and pricing, you opened a folder and leafed through pages of printed text. A huge step forward was achieved when data files began to accompany the printed “books”.

Surveying dealers was another challenge. To create our master dealer list in the UK, we got hold of the Yellow Pages directory, and telephoned every entry that had the word “computer” in it. We asked three simple questions: Do you sell microcomputers? Which ones do you sell? Which ones are you authorised to sell?The calls were done by a dedicated in-house team who, after building the list, started contacting resellers every two months, asking for sales figures. These were manually entered into paper spreadsheets, and the calculations done – you got it, manually. Printed reports then appeared every two months detailing these aggregated and projected sales of PCs, Printers and Software.

This is not to say there were no computers involved from the beginning. There was one. It was an Osborne 1 portable computer, running CP/M on a 4.0 MHz Zilog Z80 processor and 64 KB of RAM. Twin 5.25” floppies and a 5” screen completed the picture. As work volumes grew, we invested in our first IBM twin floppy PC. And then came hard disk drives… but that’s another story!


CONTEXT’s first office was at 9-11 Kensington High Street, which is now a hotel



Leave a comment

Filed under Company news, Enterprise IT, IT Distribution, IT Pricing, Market Analysis, PCs

Tech Predictions 2018

Every year, our analyst teams come together to identify technology trends they see emerging in the coming 12 months. This is a collection of these across a number of different markets.


PC sales across Europe are expected to benefit from a return to growth of commercial PCs, driven by faster upgrades to Windows 10 machines across the region and the replacement of an ageing PC base in some countries. PC refreshes will drive growing sales of thin and light ultramobile notebook and hybrid devices, but will also benefit deskbound systems, as a large proportion of commercially installed machines continue to be of this type. Even in 2017, the shift in business desktop sales towards small space-saving form factors presented a growth opportunity, and this is expected to be ongoing in 2018.

Consumer sales are likely to remain challenged as users increasingly hold on to their traditional PCs for a longer period and rely on smartphones for many of their day-to-day tasks. However, sub-segments of this market – including gaming PCs, high-end notebooks and ultramobile devices such as convertible laptops – are expected to continue to grow. While these currently make up a small part of the overall market, they present strong opportunities for revenue and margin growth.

Enterprise Technology
In 2018, cloudification will speed up greatly as services such as IAAS (infrastructure as a service), PAAS (platform as a service) and SAAS (software as a service) are increasingly adopted across the Enterprise sector.

An early consequence, one that has already begun, is a complete redefinition of the traditional market segmentation into server, storage and networking products. As convergence and scalability become increasingly important, enterprise systems will continue their migration from in-house systems to data centres.

Another consequence is the complete change in how products are paid for. In the past, clients purchased individual products with a one-off payment, whereas they are increasingly paying a monthly subscription for cloud licences with, in some cases, the hardware included “for free”.

The huge and increasing success of cloud providers such as Amazon Web services has left us with no doubt about the future of the IT business environment: it is already clear that, within a few years, most processing power (and, as a result, most hardware) will have left the office and migrated entirely to data centres.


Desktop monitor sales in 2018 are expected to be slower than this year, following PC-demand trends. On the positive side, however, business-targeted monitor sales may benefit from the PC refresh that is expected in the commercial space. Moreover, the rise of esports will continue to drive revenues, especially those from consumer-targeted high-end monitors. The gaming market serves a still-nascent industry, which has significant room to grow and provides a variety of revenue streams. Therefore, more monitor vendors will shift towards this market and offer a larger number of premium models. Increased demand for specialised features like 4K/UHD resolution, higher refresh rates, wide colour gamut and alternative form factors such as large ultra-wide or curved monitors, will increase average sale prices (ASPs) and margin opportunities.

Digital signage will remain a key driver for large-format displays (LFD). Standalone LCD displays will continue to hold the largest market share; however, videowalls and the direct-view LED technology currently used in various public outdoor applications will start to challenge their position. LFD vendors will direct their focus towards other emerging and untapped areas such as industrial manufacturing and BFSI*, and continue to compete in already thriving markets including the retail space – where LFDs enhance customer experience – as well as the education and corporate arenas. Increased competition between vendors and a greater variety of LFDs will result in more affordable pricing and continue to spur volume sales.
*banking, financial services and insurance

Printer hardware sales are expected to contract overall although, due to the ongoing shift towards multifunction and colour devices, some segments are expected to grow in 2018 including multifunction colour laser printers and, at a slower pace, high-capacity business inkjets.

Consolidation in the market and the transition towards a contractual business model continues, so unified platforms, security, digitisation, customisation and automation of those processes via services and solutions hold plenty of opportunities for vendors and their business partners to grow by adding value for their customers and increasing their productivity and efficiency.

In 2017, we’ve seen most vendors refresh their product portfolios and introduce even more reliable, secure devices that use various new technologies and offer lower cost of ownership and higher print speeds. Vendors continue to increase their focus on engaging with channel partners to target SMBs. HP’s acquisition of Samsung’s printing business is now complete and the company has started shipping its new A3 products. It is expected that sales of these will accelerate and increase competition in the A3 copier market – a space to watch in 2018.

3D Printing
Industrial space
HP will lead the way in seeing if industrial 3D printing of plastics can turn the same corner as metal 3D printing: away from being used just for prototyping and into manufacturing. HP is also to introduce a new technology in 2018 through which it will begin to set its sights on metal 3D printing.

As the other new kid on the block, the very visible and recognisable brand GE continues to gain share and will help push 3D printing even more into the mainstream and grow the market. GE acquired two of the top companies making industrial metal 3D printers last year and will carry on championing the technology internally as well as sell their printers to others. Their use of metal 3D Printing to make real jet engine parts continues to be the “poster child” demonstrating how 3D printing can disrupt supply chains and the $12T global manufacturing market. In 2018, they will push the boundaries further in aerospace as well as in the automotive and healthcare industries.

After seeing fewer printers ship worldwide each year for the last few years, the industrial side of the market will move back into growth thanks to new technologies (such as from Carbon) and big brands (HP, GE, Deloitte, etc.).

During 2018, we will see the emergence of a new class of low-end industrial metal 3D printing machines. While these are, of course, not for the masses (“low-end” in this context still means ~$150k), this new class includes $1M machines that will allow more companies to experiment with 3D printing in ways that were previously out of reach for most of them.

Desktop space
While they have not yet become a “consumer” good, desktop 3D printers have continued the unfettered growth in shipments that has been seen since the market began – it is projected to reach +39% by the end of 2017 and to continue into next year. Familiar brands, such as Kodak and Polaroid, will come to market in some regions, but this side of the market will continue to be dominated by companies like Monoprice, XYZprinting, Ultimaker and Formlabs that have a strong presence in 3D printing but are mostly unknown outside the sector.

This class of products has traditionally been defined simply as printers selling below $5K. However, growth in this sector means further refinement and stratification is needed to follow the market and the $2,500 barrier is now used to define this low end. In 2017, a new professional space emerged containing products in the $2,500 to $20,000 range (consisting of both higher-end desktop 3D printers and lower-end industrial printers). During the first half of 2017, this class grew by 64% and strong growth is also projected for 2018.

Virtual Reality & Gaming
Gaming looks to continue its healthy growth next year, with help from spectator-friendly formats such as streaming and esports – both of which provide sponsorship opportunities –gaining mind share among younger tech-savvy consumers. The recent upset over microtransactions, brought to a head by EA’s mis-steps on Star Wars Battlefront II, are symptomatic of gamers’ growing unrest about business practices they perceive as predatory, so expect rebalancing in 2018. This is unlikely to significantly depress profits but may, in the long term, lead to a healthier gaming ecosystem.

The push for 4K gaming consoles is likely to encourage an increased focus on the same potential in gaming desktop PCs, driving both display and GPU sales. Meanwhile, the recent surprise collaboration between Intel and AMD to produce integrated chips with high-end graphics capabilities feeds well into the already growing gaming laptop market, so expect the emergence of more thin, light and powerful laptops targeted at gamers.

On the VR front, 2017 ends with many new contenders entering the market and established brands teasing new hardware and this means 2018 will be a year of fragmentation for VR in the west. Whether any of these will catch the attention of the mainstream will depend on various factors, although Oculus’s imminent, lower-priced, Go is likely to be a firm favourite. As prices for high-end headsets fall and more big budget games are released, gamers are finding it increasingly easy to justify VR purchases. With luck, this will fuel a virtuous circle for both consumers and content producers.

Also, expect to see a steady flow of interesting bespoke enterprise VR applications next year, but don’t hold your breath for a single stand-out business headset or killer application – unless Magic Leap’s mysterious headset manages to make it to market and live up to the promises and hype.


Mobility will continue to gain importance and be a key success factor for retailers. Current estimates indicate that more than 50% of purchases involve the customer using a mobile phone for search, research or purchase. With online activity continuing to rise, retailers must optimise their websites for mobile in order to engage consumers early and often in their purchase journey.

Consumer expectations for omnichannel options continue to rise. The fastest-growing retail option is click to purchase and collect in store. Click and collect now accounts for more than 30% of sales in many stores, and is rising across retail in Europe. A critical success factor is the accuracy and efficiency of the collection process, with more stores having dedicated collection areas. More retailers will also collaborate with distributors for drop shipments in order to extend product range, and enable fulfilment to travel the last mile to the customer’s door.

Retailers are making up for declining unit volume sales through selling more premium devices: gaming PCs, 2-in-1 notebooks and ultramobile notebooks. A key to selling a premium mix is leveraging stores to create an experience consumers cannot get online. Successful retailers are moving beyond products and selling a larger, more profitable market basket by focusing on solutions and services that are not available online.

Leave a comment

Filed under 3D Printing, Displays, Imaging, Immersive technology, Market Analysis, PCs, Retail, Smart Technology

Q2 Round-up: New iPad Launch Softens Consumer Slate Sales Slump

With unrivalled insight into the Western Europe ICT supply chain, CONTEXT has been following with interest the evolution of the PC and mobile computing market. In many ways, Q2 saw a continuation of trends, with PC volume sales continuing to fall and consumer tablet demand remaining weak as buyers divert their spending to smartphones.

However, as always, there were some interesting caveats behind the headline statistics, not least the impressive performance of the new iPad launched in March.

Tablets and detachables
It’s true that overall consumer tablet demand remained weak during the second quarter. Shoppers continued to shift their budgets to other technologies that have come to represent the content consumption devices of choice in this market segment. Larger screened smartphones in particular have become popular for activities like writing emails and using apps as they’re always on and close-at-hand for consumers.

However, year-on-year volume decline was softened somewhat thanks to the launch in March of Apple’s seventh generation iPad. The 9.7in tablet is more powerful than the iPad Air 2 but also heavier and lacking several of the latter’s features such as a Smart Connector, and fully laminated, anti-reflective screen. However, its relatively low-price tag seems to have attracted consumers in large numbers and it sold well in Q2.

This is not unusual for Apple products, which often see strong initial sales. But if consumers continue to flock to the model, it would seem to suggest there’s a need for a high-quality iPad option with a price point more in line with current market trends.

Elsewhere, business detachables continued to grow year-on-year in Q2, dominated by Apple and Microsoft products but with Lenovo making impressive inroads. New products such as Apple’s iPad Pro with a 10.5in screen and Microsoft’s fifth generation Surface Pro helped drive this growth. Business detachables still aren’t selling in huge volumes, but it was one of the few segments to post growth in the quarter.

PC Average Selling Prices continue to rise
On the face of it, the PC market overall saw a bigger than expected drop of -15% year-on-year in terms of volume sales. However, there’s more to this trend than meets the eye. For one, Q2 2017 had fewer trading days than the same period last year and some April sales had been brought forward to March in anticipation of rising prices.

Despite weak demand in some segments, the quarter fared better from a revenue perspective, down just -2% year-on-year as average selling prices (ASPs) continued to rise. The growth in ASPs year-on-year continues to be driven by a blend of currency, component costs and a richer product mix; with the shift to high-end models a welcome continued trend.

Weaker-than-expected sell-through meant that inventory levels are a bit higher than desired, but not worryingly so. It’s likely that the “back-to-school” period will be used to get rid of extra stock, driving a reduction in pricing quarter-on-quarter.

by MCP


Leave a comment

Filed under Enterprise IT, IT Pricing, Mobile technology, PCs

Service is at the heart of Dixons Carphone’s long-term ambitions

While positive short-term results may grab the headlines, the real story is how longer-term transformation positions Dixons Carphone for future success

Positive financials are the backdrop
Given the potential pricing and downward margin pressures of BREXIT, investors were pleased at the end of June with Dixons Carphone producing an enviable set of retail results. Much focus was on the impressive growth in profit before tax of 10%, to above £500 million, with 4% increase in like-for-like revenues.

The other bottom line from the CEO: “Customer relationships are everything”
While the top line numbers headline the financial achievement of Sebastian James and team, it is the long-term transformation plans of Dixons Carphone which capture the imagination, and forecast the pillars of future success. Sebastian James highlighted transformation strategies focused on building a long-term future for Dixons Carphone:

  • Channel agnostic
  • Service as core offer and differentiator
  • Transition from ownership to consumption
  • Lifetime value relationships

Personalisation for consumption + differentiate services = Lifetime Value
The commentary highlighted the transformation of how service is now a core offering, not just an attach to the sale of a product. Services such as warranty, maintenance, and repair are creating a predictable, profitable revenue stream and a deep ongoing relationship with consumers.

Whilst mobile and phones were highlighted as one of the most challenging categories due to the rise of SIM free phones, James’s commentary emphasised how there is an aggressive plan for both financing and leasing to increase phone replacement.

To differentiate service, Dixons Carphone will roll out same day phone repair services. Plans also indicate a breakthrough 7-day repair promise compared to 28-day market standard. These strategies not only differentiate Dixons Carphone, but create positive lifetime relationships beyond the sale of a handset. A NPS (Net Promoter Score) in the 90s is particularly noteworthy and evidence of positive customer response.

Last year Sebastian James pledged to increase service income from £500mn to £1 billion. We did not hear any specific numbers on the investor call on progress towards this goal. At £1bn, services revenue would represent 10% of today’s revenues, and would outstrip Best Buy currently at 7%. Clearly both national tech retailers are seeing a bright future in services both as a differentiator and profit stream to offset product margin pressures.

Dixons Carphone is well positioned to profit as the “Digital Plumber”
One of the most exciting and innovative long-term developments is Dixons Carphone’s journey to becoming the digital plumber of the nation in its joint venture with SSE, briefly referred to in the presentation. It is all about occupying a place of trust in people’s homes, making life easy for the customer through leveraging the Knowhow expertise of Dixons Carphone and supporting SSE’s 5 million smart-meter customers. If the two companies can make this work, they will have moved the point of sale from the store and the smartphone into the home, a new offline revolution for tech retail.

The store as destination for new technology
There is one area where Dixons Carphone is lagging the market, and that is making the store a destination for experiencing new technology. Given that Oculus Rift and HTC Vive were launched at the end of last year, not enough has been done to create experiences for customers. The price-point of Virtual Reality is evidently beyond the purse of most consumers, but customers are looking to retailers to take a lead in demonstrating this and other new technology such as smart home. We did note, however, that in next year’s plans Dixons Carphone will be introducing a new in store gaming proposition and look forward to seeing what they do for this growing category.

Positive short-term results complimented by strategy with promising trends
Beyond the top line numbers, reaching more than £1 billion in online electrical sales is a significant milestone. The projected 24% average annual growth in home delivery, and one day delivery coming in the next year, Dixons Carphone is strategically positioned i) to capitalise on one of the largest customer bases ii) to be more profitable than a pure play business, with the capability to leverage its personalised “My Account” approach iii) to sustain customer relationships that translate into profitable life time value.

by AS

Leave a comment

Filed under Connectivity, IT Distribution, Market Analysis, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs