GFK takes an in-depth look at the IT market over the last year

Fresh products keep IT from growing stale

July was a tough month for some of IT, with the total IT category declining 1.9 per cent in volume sales, July 2011 on July 2010.

Over the same period, however, IT’s value has increased 5.3 per cent as a result of a general increase in prices, driven by a few key categories.

Both mice and keyboards saw an increase in Average Selling Prices (ASP) through July, up from £13 to £16 GBP and £17 to £20 GBP respectively.

Newer categories also contributed to the value growth of Total IT with e-readers showing a general increase in price, from £86 GBP in July last year to over £120 this year as consumers choose more expensive product as a trend.

Primarily, it is the newer categories that have been contributing to IT’s solid performance in the face of continued economic uncertainty.

Main growth categories in July 2011 on July 2010 were communication cards, with new wireless standards continuing to benefit from the growth of home wireless internet, resulting in a 44 per cent value growth year on year.

Similarly, e-readers grew strongly in both volume and value as the new category takes hold across more channels, showing a striking 400 per cent+ growth year on year in value and a 300 per cent+ growth in volume.

An even more salubrious performance in July was that of webbooks (GfK’s term for tablets), containing expansive growth at over 700 per cent in value and 900 per cent in volume – though with a declining ASP – which has helped most of all in ensuring IT has not fallen into too deep a decline.

IT’s growth was not entirely down to newer categories, with some of the older stalwarts playing a part as well. July 2011 on 2010 saw value growth for storage of 24 per cent and corresponding volume growth of 30 per cent, reflecting the fact that storage is one of the few categories where IT saw a general decline in ASP.

In fact over the last seven months of YTD 2011 the ASP of storage devices has fallen from £68 to £63, possibly reflecting that ever growing storage capacities are finally outgrowing consumer demand for digital storage space.

Similarly, newer kinds of communication cards and devices, covering networking cards and routers/hubs, have resulted in particular growth in these two categories. July 2011 on July 2010 they grew 44 per cent and 22 per cent in value respectively as newer wireless standards such as N300 gain more traction with consumers.

It is not all good news on the IT front however, as these new categories are needed to maintain the growth now more than ever. The largest IT category, notebooks, has declined three per cent in volume and 12 per cent in value July 2011 on July 2010.

Netbooks, which some think is being quickly replaced by webbooks, has fallen away dramatically and is now declining 32 per cent in volume and 35 per cent in value over the same period.

As an effect of this, we also saw computer mice fall into a quite heavy volume decline, -18 per cent July 2011 on 2010 as fewer computers and particularly fewer notebooks and netbooks sold means demand for peripherals has fallen.

In short, it appears that only the extremely positive performance of these new categories is keeping the air fresh around IT.

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