Category Archives: PCs

Tech Predictions: 2017

Untitled.pngPC’s in 2017
In 2017 European PC sales in the business segment are likely to benefit from a gradual pick up of Windows 10 refreshes. In Western Europe in particular, the commercial PC segment is expected to also benefit from the need for enterprise mobility solutions which will be a co-driver in sales of both notebooks and mobile 2-in-1 products.

The consumer PC segment is expected to remain more challenged across Western Europe. There is a possibility that component shortages, which impacted product availability in 2H 2016, will lead to price increases in the first half of 2017which could affect demand. However, on a positive note, the market is likely to benefit from continuing high demand for gaming PCs. While this segment remains small in terms of volume, new technologies – including virtual reality – will also drive growth that will have a positive effect on revenue and margins.

From a wider, macroeconomic perspective, PC sales in a number of EMEA countries are likely to continue to be affected by uncertainties including currency fluctuations and political instability.
Marie-Christine Pygott, Senior Analyst, PCs

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View on Apple
Although you never know what Apple will pull out of the hat when launching new products, the last few years have been quite staid. The last “new” new Apple product was the Watch: but this was heavily trailered so, when it finally arrived, it wasn’t a surprise. We have waited in vain over the years for an Apple TV, and recently yawned when the new MacBook’s Touchbar was announced. In 2017 we have the prospect of yet another phone, the iPhone 8, and not much else.

Except, after much speculation, Apple has acknowledged for the first time that it is investing in autonomous car technology. In a letter to US transport regulators, Apple said the company was “excited about the potential of automated systems in many areas, including transportation”. Apple was first rumoured to be working on an autonomous vehicle in early 2015, when reports suggested that the company already had 600 employees working on an electric car design. Later that year, more rumours suggested that the company hoped to launch an electric car to the public by 2019.

So maybe Apple can surprise us next year. The race for electric vehicles is hotting up, and with the word being that Apple has been in talks to buy luxury-supercar maker McLaren, we may just see a prototype iCar roll onto the stage in 2017 after hearing those words, “one more thing”.
Jeremy Davies, CEO & Co-founder

Enterprise
CONTEXT will be closely tracking the evolution of storage systems and converged architecture: as cloud-managed wireless network service companies slowly but surely replace in-house wireless LAN appliances, we expect continued strong growth on these two fronts. Companies to watch: Cisco Meraki, Open-Mesh, Zebra (part of Extreme Networks), Ruckus.

Sales of solid-state drives (SSDs) have increased throughout 2016 and, for the first time, surpassed those of hard disk drives. As the price of SSDs fall and their capacity increases, 2017 will see this trend continue. In 2014, we predicted that 90% of storage components would be SSDs by 2020, and the industry is well on track to achieve this.
Gurvan Meyer, Senior Research Analyst, Enterprise Team

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Displays
Large Format Display sales in 2017 are expected to continue to grow strongly with demand being driven by the education and corporate sectors. For AV providers, the corporate business market continues to be a huge growth opportunity, with a big shift towards interactive products for meetings rooms, as corporates increasingly collaborate over multiple sites, with numerous remote attendees.  The education market is also expected to be a key driver of growth in the LFD segment with educational institutions increasingly adopting display solutions to change and enhance the ways they communicate with students, staff and visitors.
Lachlan Welsh, Senior Analyst, Displays

Imaging
Printer hardware sales will continue to contract overall, though some segments are expected to register growth in 2017, such as business inkjets with higher end products due to be released in 2017 to compete with laser devices. The shift from hardware to contract sales continues, therefore, the importance of partnerships and focus on channel partners will prevail. HP’s acquisition of Samsung printer business is expected to complete in the second half of 2017, as companies join their efforts aiming to disrupt the A3 copier market business.
Zivile Brazdziunaite, Senior Market Analyst, Imaging

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3D Printing
2017 will continue to see the two sides of 3D printing – the personal/desktop side (those under $5,000) and the industrial/professional side – evolve separately.  Desktop 3D printers will become even more affordable (some already cost as little as $300!) while the some of the world’s biggest brands will increase their presence in the Industrial/Professional market where technology will continue to advance and improve.

Desktop market leader XYZprinting has already expanded its brick-and-mortar retail presence – at Best Buy, Toys-R-Us, and Barnes and Noble in the US, and Darty, Dixons and Media Saturn in Europe – and it is expected to continue with aggressive price points in to promote further retail expansion around the globe. Next year will see HP fully enter the 3D printing world with the first shipments of their professional Multi-Jet Fusion 3D Printers, and a new business is to emerge from GE after their acquisition of two of the top five metal 3D printing companies in 2016.  HP and others will champion a change of focus in the plastics 3D printing market from rapid prototyping to mid-range production.
Chris Connery, Vice President Global Analysis and Research

VR & Gaming
The world of eSports will continue to grow in both popularity and recognition, as a movie is planned starring Will Ferrell on the burgeoning phenomenon. Vendors and retailers will pay more attention to PC gaming as the category offers them the chance to make up for losses in a sector which has been declining in the last few years. High average selling prices for gaming products, excellent attach rates and margins for gaming accessories, and the availability of unsecured consumer borrowing will be major drivers. Virtual reality will also continue to grow in the consumer space, although still at a modest pace. However we expect to see more HMDs going into the B2B and corporate reseller channels for which products such as the Hololens are a gift.
Jonathan Wagstaff, Country Manager UK & Ireland

Smart Home – Battle of the Giants
Back in October 2015 we predicted that new forms of control for smart home devices would stimulate growth in the market. We highlighted three: voice activation, gesture recognition and mind control. The first two are already here: voice control has exploded since Amazon launched the Echo in 2016 and 5 million devices have already been sold. We predict that this trend will grow quickly in 2017 with the Amazon Echo continuing to sell and the launch of Google Home in 2017. Google will apply a massive marketing budget – in the US they are already paying for end-of-gondola slots for Google Home devices.

With this in mind, we see four, and potentially five, giants battling for the smart home in 2017: Amazon, Google, Apple (with Homekit), Samsung (with Smart Things) and Microsoft. The ace up their sleeve for Amazon is entertainment (access to Prime Music), for Google it is search, for Apple and Samsung it is interoperability (potentially using the TV), and for Microsoft it is building out from the PC. We are optimistic that consumers will benefit: with a more coherent offer, small start-ups will no longer be able to create proprietary systems and existing systems will make themselves linkable to the big five in order to survive. It is too early to place bets on a winner, but Amazon has rapidly taken advantage of being first-mover. Gesture control will grow and develop in 2017, but mind control will need to wait for another year!
Adam Simon, Head of Retail

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Filed under 3D Printing, Displays, Imaging, IoT, IT Distribution, Mobile technology, PCs, Retail, Smart Home, virtual reality

Is Black Friday dead? A US perspective

Guest blog by Chris Petersen, CEO of IMS, Inc.

Is Black Friday dead, or just rapidly waning? Data indicates the demise of the premier kickoff to holiday shopping in the US. It’s not just about the economy and consumer confidence, although those are key factors. The retail phenomena unfolding right now is about universal changes in consumer behaviour, regardless of socio-economic status.

Black Friday has declined in US retail … will the same trend happen in Europe?
In the not too distant past, stores were the premier focal point of holiday shopping. Black Friday was an event created by bricks and mortar retailers to entice consumers to come shopping on the Friday after US Thanksgiving, which always falls on the 4th Thursday of November. Since many US customers take off from work on Black Friday, it became the quintessential retailer marketing event to lure shoppers to the stores with “best deals” of the season. The theory was that if shoppers came early to find a deal, they would come back to stores for the rest of their shopping.

Not surprising, the UK and other European retailers adopted Black Friday as a promotional event to kick off the holiday selling season and draw traffic to stores. CONTEXT’s analysis of distribution trends in 2015 was very predictive for UK retail sales spiking for Black Friday. Will the trend continue in 2016?

Black “Friday” — death by a thousand clicks
Increasingly retail stores have been jumping the gun on Black Friday by offering Black Friday sales before the actual Friday. The result in the US is that there is no longer a singular event. Black Friday has suffered scope creep, and it literally has become a “Black Week” of promotions and deals.

More importantly, consumers don’t see Black Friday as just “stores” any more. Amazon and other online retailers have creatively capitalised on “Black Friday” by offering daily online deals across an entire week, or more. This has created a new trend for “Cyber Monday” which is the first Monday after the traditional Black Friday. In the US, workplace productivity actually drops on Cyber Monday as people at work scramble to get better deals on stuff they didn’t buy or couldn’t get on Black Friday. Cyber Monday is projected to be the single largest volume day of the entire holiday shopping season.

Did the same trend happen in the UK and other countries? Compared to the US, the UK has a higher % of sales occurring online, especially for technology. Many of the UK promotional ads in 2016 now in fact show the Black 5 days of deals: Thursday, Friday, Saturday, Sunday and Cyber Monday.

The net result is that today’s consumer is an empowered consumer. They are not bound by place or time of event. This translates into a much diminished effect of single retailer store events like Black Friday.

Large retailers have privately confided that Black Friday needed to “die”. The traditional approach of cramming all deals into a single day dramatically lowers prices and margin. It would be healthier for both if retailers and consumers could evaluate offers and spread shopping over a period of time. In fact, that is how today’s omnichannel shoppers are already behaving – shopping multiple days in multiple ways.

So what happened in the UK for 2016?
Were Black Friday sales up again this year? Or, did consumers shift more of their shopping purchases to Cyber Monday? How much of their Christmas budget have they spent? The final store sales numbers won’t be tallied for a couple of weeks.

However, CONTEXT is conducting consumer pulse survey right now. We are asking consumers when they shopped, and how much they purchased on Black Friday and Cyber Monday. It will be interesting to see how much they expect yet to spend in the rest of holiday season.

 

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Filed under IoT, IT Distribution, Market Analysis, Mobile technology, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs

Touch Bar Blues

I’m on my third MacBook Pro.

I remember the thrill of ditching Windows for my first MacBook Pro and feeling ultra-cool as the Apple logo lit up on the cover. Google and the Cloud liberated me from hard wired office email and document sharing standards, and I could remain Excel-Word-Powerpoint productive with the rest of the company. I truly had the best of all worlds.

Connectivity wasn’t an issue. In the beginning there were a few problems attaching to older projectors as sometimes the adapter didn’t work. But that was early days, and soon, whipping out a Mac or a PC in company and customer meetings was a non-event. When my 15″ inch storage got too small, I installed a 1TB replacement SSD. And when I thought the next 15″ got too big and heavy, I sacrificed quad core for dual core in the 13″ version, and never noticed the difference. Importantly, I was able to connect to all my devices as before.

I was looking forward to the new MacBooks.

I was hoping both the 15″ and 13″ would lose some ounces, svelte the design, get faster, and blow the lid off storage capacity, all topped by an OLED touchscreen display. And the assumption – of course – was that I’d be able to integrate seamlessly into the office just as before.

Well, it isn’t to be. Shame. I don’t need a touchbar, and I cannot even connect to my iPhone 7 without an adapter. I’m going to need another adapter to connect to my back up drives (yes I do use Cloud backup but I play it safe) and I haven’t even begun to think about how I connect to the company projectors, let alone the myriad versions in customers offices around the globe. So until USBC is truly universal, and upgrading means I have no connection issues, my trusty 13″ will do a perfectly adequate job for a few more years.

I’m fine with Apple pushing us early into new standards, but it should be taken easy. Progress on PCs today is not what it was ten years ago. The latest is not today necessarily the greatest. Much less in a company environment. So I’ll wait. Meanwhile, that HP Spectre looks very nice… does that make me a “MacBook refugee”?

by JD

 

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Windows 10 adoption accelerates in early Q4 2015

The adoption rate of PCs pre-installed with Microsoft’s Windows 10 operating system has increased significantly at the beginning of the fourth quarter.

The first two and a half weeks of October 2015, Month 3 after the launch of the new OS, saw a total of 187,000 new Windows 10-based PCs go through Western European distributors, a number that translated into a 34.5% share of the Windows Home and a 14.7% share of the Windows Business segment (including the Windows 7/Windows 10 downgrade version).

Vendors driving the transition to Windows 10 Home in the channel during early October were HP, Acer, Lenovo, ASUS and Toshiba. The majority of new Windows 10 Home PCs sold were notebooks (92%), with detachable or convertible systems accounting for 13% of these. Meanwhile, HP, Fujitsu and Lenovo were driving the transition to Windows 10 Pro. New systems included desktops, notebooks and workstations, with the majority based on the Windows 7/Windows 10 Pro downgrade version of the new operating system.

Despite this significant rise at the start of Q4 2015, the adoption rate continues to be lower than that of most previous versions of Windows, particularly in the Home segment. In 2007, Vista was pre-installed on 67% of new Windows Home PC devices sold by distributors in the first few weeks of Month 3 after launch, while Windows 7 made it to a 76% consumer share in the same period following its 2009 launch and Windows 8 to 83% in 2012. Adoption of the business version of all of Windows 10’s predecessors was slower than that of the Home version but, even so, Windows 7 was preloaded on 63% of Windows business PCs in the first few weeks of Month 3 after its launch. There are a number of reasons for this: Windows 10 was the first operating system to be made available as a free upgrade to many consumer users; the availability of new products was delayed by a late release of t he build; and the transition process has been considerably hampered by high amounts of old PC stock.

by MCP

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Windows 10 has launched – how quickly will we see it in European IT distribution?

Microsoft has released its long-awaited Windows 10 operating system. From today, Windows 10 is officially available as a free upgrade to people using Windows 7 and Windows 8.1 on qualified devices, or pre-installed on new devices.

It might take some time however, before we see the adoption of Windows 10 gather pace after today’s launch.

While the new OS is officially available as a free upgrade as of today, Microsoft will deliver this in waves. Members of the Insider program will receive it first, followed by consumers who reserved a slot in the upgrade queue.  While Windows 10 is also available pre-installed on new PC devices from today, a tight release schedule to OEMs and high levels of old PC stock still around in many Western European countries mean that consumers are likely to still see plenty of Windows 8-based devices in their local shops today – and many of these will be offered at very attractive prices. Finally, adoption in the commercial segment usually comes with a delay. The feedback we’re getting here is that there is strong interest from business users in Windows 10, but that noticeable refresh activities are unlikely to happen before some time in 2016.

Microsoft itself expects a phased adoption of Windows 10. During the company’s recent Q4 2015 earnings call, CEO Satya Nadella spoke of “three distinct phases”: the “upgrade phase”, starting now; the autumn time frame, when “you will see the devices from all the OEMs going into the holiday quarter” and “then the enterprise upgrades”.

CONTEXT’s most recent data, covering distributor sales up to 19 July, do not yet show any new PC devices with Windows 10 pre-installed – a fact, which will be down to the relatively late release of the new OS to OEMs.  By contrast, all four previous OS releases by Microsoft had seen a ramp up of new devices in distribution a few weeks before their respective launch date. It will be interesting to see when the first Windows 10 devices will show in our data, and how quickly they will then ramp up. CONTEXT will be closely monitoring this.

by MCP

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Will IT distribution ride the W10 wave? Watch this space!

Next week, Microsoft will begin to roll out its new Windows 10 operating system. From the 29th July, Windows 10 will be available as a free upgrade to people using Windows 7 and Windows 8.1 on qualified devices, and pre-installed on new ones.

The latest Windows operating system comes with a host of new features, including improved security, the return of the start menu, the “continuum” (a multi-platform approach that lets the OS adapt to whatever device is being used) and universal apps that can be used across all devices.

Clearly, the expectation is that Windows 10 will bring a number of improvements, and it is hoped that the new OS will eventually help (re)fuel PC demand in Europe where PC sales have recently suffered from inventory issues and the effects of currency fluctuations. While Windows 10 is not expected to have an immediate impact on PC growth in the region, it is widely thought it will help boost sales over the course of 2016.

CONTEXT is in a unique position to measure such expectations against reality. By tracking distributor sales of new PCs pre-installed with Windows 10 from the moment of launch, we will be able to follow the adoption rate of the new OS on a weekly basis. What is more, we will also be able to compare this with Windows 10’s predecessors – and, as we all know, there were significant variations in penetration of those, particularly in the business sector.

Vista, for example, was launched at the end of January 2007 and accounted for only 39% of Windows business PC sales across Western European distribution six months after its launch. It was followed by the more successful Windows 7, launched in late October 2009, which made up an impressive 86% of business PC sales a similar time after its release. Microsoft’s next OS, Windows 8, made it to a 50% share of business sales half a year after it was launched in October 2012*.

It will be interesting to see how quickly Windows 10 penetrates new PC sales in distribution and if it follows the pattern of previous launches. Watch this space for more updates!

*All data is based on share by units of business OS installed on Dektops, NoteBooks and PC workstations in Western European distribution and includes dual OS versions.

by MCP

 

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Weak euro puts pressure on hardware pricing

by Marie-Christine Pygott, Senior Analyst

Towards the end of January, the euro hit a new low against the US dollar. Having lost 11% of its value between July and the end of December last year, the Eurozone currency was down by another 6.8% against the US dollar in January after the new year opened with a series of events that led to increased pressure on the currency.

For the large, non-European IT manufacturers, this has been bad news; where components are sourced in US dollars and revenues generated in euros, the devaluation has meant a significant increase in production costs and a strain on margins. Our distributor pricing data shows a 7% rise in the euro cost of components in the few months between July and December last year, despite a small decline in dollar terms. While prices did not go up to the same extent in real life, it is only a question of time before pricing shifts will show in our Channel data.

And show, it will. It is clear that IT Vendors cannot just simply absorb the recent rise in costs. In fact, we are beginning to see list prices in our February data go up vs. January for a number of Desktop, Notebook and Server SKUs. What we will also see, and to an even larger extent, are “hidden” price increases through the introduction of new systems at higher price levels, or through a reduction in the performance of existing SKUs that need to be kept at a specific, stable price point.

Consumers and new business customers will be the first to feel the change; unlike customers of business deals, which are already in place, they will not benefit from contractual obligations that keep prices stable for longer. And chances are that price increases in the consumer segment will have an impact on volume growth. Whether that’s ultimately a bad thing remains to be seen. If new technologies and form factors keep consumer demand at a high enough level to further spur refreshment cycles, the effect of lower volume sales on margins could be more than offset by a shift to the higher end of the pricing scale.

 

 

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