The number of UK PC stores may have fallen dramatically over the past ten to 15 years, but the worst is over – and traditional computing is here to stay – says GfK.
The analyst’s supply chain director Carl West was talking at the Northamber Expo 15 last Friday, and provided an overview of the UK PC market.
Here’s our 12 key pieces of information from the talk, and information on how you can be there for West’s next keynote.
1. Consumer confidence is at a 15-year high
The GfK Consumer Confidence Barometer indicates we experienced a 15-year high in June 2015.
£0.3 billion more was spent in the last 12 months, compared to the previous 12 months. More people are spending money on tech in the UK too – Barclaycard data shows that tech spend was up six per cent on the previous year, with non-tech products up three per cent.
"In the retail sector, it means that we are now spending more money," said West. "With record low interest rates, finance is a viable option. There is an interest rate increase next year, but spend is on the up and this is a good sign for retail as well as business."
2. Software licensing is on the up
Software licensing has seen an increase again this year. MSPs are focusing more on in-house programming and development, creating custom interfaces for their clients, rather than relying on off-the-shelf solutions.
Resellers are focusing more on services and monthly billing.
3. The worst is over for PC stores
There were 12,756 fewer traditional PC outlets in 2014 than there were in 1998. See the graph above for a breakdown in the types of businesses.
West said: "Some have fared better than others – for example it’s been quite a bloodbath for independent photo specialists, as smartphones have taken away the need for cameras.
"Computer specialists have shrunk but it’s stabilized. That rate of decline in the number of computer specialists has slowed down.
"Computer specialists have survived the worst of it. Whatever they’ve done to their business – if they’ve bunkered down or sold through the recession – they’ve survived the worst of it."
While independent stores have been hit hard, there’s a strong growth in system houses (resellers) as well as telecom/smartphone specialists.
4. Great Britain’s strong online growth in durables
Looking specifically at internet sales, Great Britain has the largest share of online sales and durables compared to European countries.
"Tech online also tends to have a higher ASP," West said. "People go online to save money, but the average selling price is higher online compared to offline."
5. Security software is in demand
Network security, security software, storage and management and san are all doing well at the moment.
"Businesses are spending more money on security and storage management, while retailers are spending more money on internet security and tablet security," West added.
6. Business growth in computing
Even though there’s a record high in unemployment at the moment, more employees are turning up at work. This means that laminating, binding, office accessories and print are on the up, with SMB and SoHo customers.
"It’s a buoyant environment for print – there’s steady demand there," said West. "Desktop within the business place is also starting to grow again, as is mobile computing."
7. Low notebook prices are driving growth
West explained: "We’re now seeing positive growth on notebooks. Prices of notebooks in the retail sphere have come down, resulting in a growth in volume.
From August 2014 to July 2015, laptop volume sales rose 19 per cent, while value sales increased by six per cent.
The laptop market was boosted by falling prices and heavy promotion on the sub-£250 price bands.
8. Components, memory and more are on the rise
Components, memory and graphics cards are growing, while NAS and storage are in growth too. Plus, wireless access points and switches within the workplace have been growing.
9. Traditional computing is here to stay
Carl West said: "Traditional computing is here to stay – yes there are more tablets, but desktops and notebooks have gone from growth to decline and so forth.
"The office environment has been growing, so demand for more traditional computing is increasing."
From August 2014 to July 2015, desktop volume sales decreased 11 per cent, and on the value side they fell by nine per cent.
However, in Q2 2015, PCs and monitors accounted for 36 per cent of all the spending on IT products in the UK, while from January to March 2015, mobile PCs accounted for 85 per cent of all PC sales in the UK retail channels.
The value of the UK PCs market in Q2 stood at £623.6 million.
10. B2B bucks tablet decline
While the price of tablets has fallen in recent years, with sales in decline, tablets are still growing on the B2B side.
"IT resellers and mail order companies are selling more tablets, which opens up discussions for storage, device management and more that resellers can sell – it creates a whole ecosystem around the tablet," West said.
"One area burgeoning right now is the hybrid clamshell. Also, Apple has realised productivity requires keyboard and screen – that’s an area of opportunity."
Overall tablet sales from August 2014 to July 15 fell 22 per cent in volume and 30 per cent in value. The ASP is down 11 per cent to £195 (Jan to March 2015).
"As we see a shift from media tablets to computing tablets, it’s an opportunity within education, business and retail. The ASP at business is higher than at retail," added West.
11. The importance of touch and the monitor market
In Q2 2015, 19 per cent of all the PCs sold in UK were touch-enabled.
Also, from January to March 2015 around 39 per cent of all the PCs and monitors sold in the UK were sold online. This represents a 4.1 per cent increase from the same time last year.
12. There’s growth in gaming
There’s growth in keyboards and mice, SSD is a big growth area in gaming and the consumer space, as are headsets and desktops, and mobile computing.
"It’s driving things like 4K monitors, and ASPs are going up," said West.
Don’t miss Carl West’s next talk
Which tech will be under the tree this year? Analyst GfK’s supply chain director Carl West will run through the hottest product categories, as well as provide a detailed look at how the UK PC/tech market has changed this year, the state of the economy and also what trends are expected to emerge in the future.
West will be giving a talk at this year’s PCR Boot Camp North conference and expo, which takes place on November 18th at the Royal Armouries in Leeds, plus GfK will have a stand at the expo.
The event is free for resellers, retailers, system builders and etailers to attend – so make sure you sign up here and get the inside track.
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