The start of the year saw a lot of turmoil in the markets, with strong undercurrents of uncertainty. And, due in part to events including the destruction witnessed in Japan and unrest in the Middle East, the IT markets looked more unpredictable by the minute.
Despite growth of half a per cent for the UK economy in the first quarter of 2011, with oil prices set to go higher and component supplies from Japan likely to be disrupted through the second half of 2011 and into 2012, there could be some unexpected and challenging times to come for the channel.
However, it is not all doom and gloom. The first quarter of the year has provided some good results in the IT mail order and IT Rreseller channels. Growing 67.5 per cent in volume terms Q1 2011 against Q1 2010, the IT market has seen positive results from the headset, keying, storage, software and web book categories.
With sales being up just as strongly in the month of March due to the end of the financial year, there appears to be some evidence against the possibility of a double-dip recession.
Yet when looking more closely, total mobile computing (notebooks and netbooks) sales still fell 5.9 per cent in volume terms during Q1 2011. Similarly, the desk computing market shrank 18 per cent over the same period.
So what has driven growth in the IT reseller and mail order categories?
The web book market was one growth driver in the latest quarter. We have recorded in the B2B (IT reseller and mail order channels) and retail segments an increased number of web book models -- from 18 in Q3 2010 to 66 in Q1 2011.
This is clearly a growth segment but all these new brands and models have yet to fully establish their drivers for purchase - whether they are, for example, additional, replacement, or upgrade purchases. Some observers may therefore perceive the segment as quite risky.
With pricing already falling over the last year, down to £398 in the B2B channel in Q1 2011, this means an interesting time ahead for web books. Will the devices will truly appeal to business users?
Keyboards are also selling well, which is linked to the growth of web books. Attached docking keyboards for web books and the increasing need for a keyboard rather than a pointing device on all-in-one PCs has seen keyboard market volumes grow 16 per cent in Q1 2011, compared with Q1 in 2010.
Furthermore, the headsets category has seen tremendous growth in Q1 2011, driven by the rise of internet telephony, which is being adopted much more quickly by corporations using proprietary protocols to benefit from cheaper communications offerings.
Another IT product group that showed tremendous growth in Q1 2011 was storage. The storage category expanded 23.5 per cent by volume in Q1 on the year-ago quarter. Further growth in both external and network attached storage (NAS) fuelled sales for the category as a whole as capacities continued to increase to support business needs.
Software also did well in the IT reseller and mail order channels. Software sales grew over 100 per cent in March 2011 from March last year. The segment saw major growth coming from productivity and utility suites. It is a crucial requirement for businesses to focus on software that provides a functional benefit to the end user.
It remains to be seen how the rest of 2011 will pan out, whether we will dip into a second recession or things will remain flat. However, with global economic pressures set to continue, the IT markets clearly are still in for some tough times.
Greg Allen is a senior account manager at GfK
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