The season to be cheerful?

The IT retail sector is preparing for one of its most challenging year-ends in the last 15 years. So far, we have seen sales across all product groups fall by almost four per cent from January to August 2008 to the same period this year.
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This has been compounded by consumers tightening their expenditure on goods and services, and there is now an obvious degree of uncertainty about how this Christmas will play out in light of this. However, for the IT market there are some encouraging signs that it may not turn out to be as bad as some expect.

When comparing January to September 2009 against the same period last year, the IT retail market recorded a 4.1 per cent growth. And in value, a low, yet surprising, growth of 1.2 per cent. A large proportion of this year’s growth is due to development of key product areas. For example, the continuous success of mobile broadband has given rise to the logical growth of USB mobile modems.

Furthermore, netbook sales have continued to progress. If we look further, the connection between these categories is apparent. Where last year only one modem was purchased for every three laptops sold, this year it stretches to one for every two laptops purchased. This clearly indicates there should be some opportunity over this Christmas to increase attachment ratios on mobile broadband and laptops.

Another category which has seen good growth in this turbulent year is storage. Network Attached Storage devices (NAS) with media and external HDD have both seen growth on last year. NAS with media has seen a growth rate of 60 per cent on September 2008.

External HDDs have seen growth of 17 per cent over the same time frame. With key developments in the industry surrounding media storage and network storage solutions, there are likely to be good opportunities this Christmas and certainly into 2010.

There are other positives to be taken out of the IT retail sector. E-Assistants are showing good value and volume growth, and with recent announcements in the retail sector, this Christmas could see some positive results from increased outlet participation and distribution.

Software’s another area which has seen growth on last year with recent releases of new 2010 security ranges coupled with new operating system launches. The IT retail landscape may well have changed since December 2008.

However, with the continued fast-paced development of IT devices and services, there is ample opportunity to capitalise this year. It should also be remembered that while some consumers have closed their purse strings, there are still almost 29 million people employed in the UK and those people may hold the key to making IT a merry Christmas.


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