Hot hardware sales in June may have been just the tonic for the IT channel to save the April-June quarter, as first indications from analysts are that May was a shocker.
In releasing its May market share figures, channel research company Inform stated that, across-the-board, channel sales figures for PCs, servers and notebooks were down for the month. While noting that things appear to have turned around in June, Phil Burnham, senior research analyst at Inform, said the May decline was evident both in volume of units shipped and the total value of sales.
According to Burnham, the whole January to May period was a tough one for both global and local vendors, with most finding it hard to maintain numbers. Additionally, he noted that while the volume was down in terms of market share, some of the big global vendors suffered less than others and local channels made some headway.
"The market was flat in the January-May period," Burnham said of hardware. "PCs were abysmal, but the whole market deteriorated in May. Our research shows most of the big vendors did not fair well."He put the poor figures down to three "main influences" including component shortages, consolidation and scaling down amongst the corporate community, and an expectation that prices would be cheaper after the introduction of the GST.
The good news for the channel, Burnham said, is that things appear to have improved dramatically during June, as consumer and corporate markets took advantage of Government offers and sheer necessity drove purchasing in the leadup to the GST's introduction. With hardware cheaper under GST, he also sees greener pastures in the second half of the year.
According to Burnham, PC figures represent about 80 per cent of the market they are researching. Most notable in the PC figures is Hewlett-Packard's sustained market share growth, which has moved from 16.5 per cent in January to 20.9 per cent in May.
This has pushed it to the top of the channel sales list according to Inform, leapfrogging Compaq (17.5 per cent) and IBM (14.5 per cent) the traditional number one and two players.
"In PC sales, HP appears to have suffered far less than some of the others," Burnham said. "Compaq has traditionally led the PC figures but HP has turned that around and if you look at the RITA Awards results, I think they will hold onto that position."Intel server and notebook sales through the channel were a different kettle of fish for HP, falling further behind Compaq and failing to make any ground on Toshiba.
In the server market, Compaq has sustained its market share growth, jumping from 24 per cent in January to 35.4 per cent in May. Over the same period, HP's market share slipped from 22.0 to 20.3 per cent.
Toshiba's position in the notebook market remains dominant with a surge from 39.1 per cent in April to 43.7 per cent in May. Burnham suggests that Toshiba benefited from component shortages during May which he said "appear to have hit [main rival] IBM harder".
Over at analyst International Data Corp (IDC), Logan Ringland, market analyst, PCs, said his research is compiled quarterly as opposed to monthly, so figures for April-June are still being assembled. His initial response to data received so far is that May was slow but June was very strong, "especially in consumer space", he said.
He also noted that "white boxes appear to be going off" in the second quarter of this calendar year and that the second half will be "big" for hardware vendors.
"Component supply is still nowhere near perfect, but it is getting better," Ringland said. "I think Q3 will be big as PCs are cheaper despite the fact that traditionally it is the quietest quarter of the year.
"I am not sure if the consumer market will be so strong as they spent so much in Q2, but the corporates should come out of the woodwork."