While many might view the latest PC shipment figures from Gartner as another nail in the PC coffin, the reality in the UK is slightly different. The latest figures show global decline in shipments by just over 5%, the seventh quarter of consecutive decline. And yet, we are seeing growth numbers in the UK for a number of reasons.
Although Gartner said the impact of Brexit has yet to be felt, government spending on technology since the vote in June has been increasing steadily. The public sector is upgrading PCs, launching new initiatives and signing POs quite readily. One reason could be that the current government is trying to get budgets through and technology up-to-date before the real impact of the split from Europe is felt. Consumers are mirroring this behaviour. The short term impact of Brexit has been positive – the mentality appears to be ‘buy now – it could be much worse in a year’. With many vendors measured in US dollars, the price inflation in the UK PC sector will result in higher costs or less discounts, so businesses and consumers are rushing through projects and purchases before Brexit becomes a reality.
Another reason could be the decline in the pound, encouraging foreign organisations to come shopping in the UK – upgrading technology while the cost in the UK is lower than it is for them at home due to the currency fluctuation.
Of course, there is always the traditional reason; people are finally upgrading. With data security almost a daily headline, IT managers and CIOs are taking less risks with older machines – upgrades mean improved security features and functions, and less chance of breaches or hacks. Additionally, as new technologies, apps and software are introduced to the market it fuels a desire from consumers and businesses for newer, better equipped and more powerful PCs. While the gaming market is still robust, thanks in part to the onset of virtual reality, it is the need for more powerful laptops that is providing the optimism in the gloomy PC market. The vendors themselves are also watching the sector with interest, and rumours abound about the possibilities of further consolidation, particularly surrounding a possible Lenovo/Fujitsu deal. With the market in decline, vendors are buying their way into new customers and install bases and taking more costs out of their supply chains.
All of which is great news for the channel; with more consolidation comes more vendors looking to embrace distribution to help them gain market share and new customers. Michael Dell – once the champion of the direct model – has now said that he will further enable the channel if it proves to be the best route to market. And, with 50% (and rising) of his business already indirect he has recognised, like many others, that the cheapest, easiest and by far most effective way to reach new audiences is though channel partners.