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Tech disties: What the HELL happened to our sales growth in Q1?

No more XP refresh activity, iPad sales shrink, IBM servers dans le toilet

Tech disties’ sales growth across Europe almost halved in Q1 as the XP migration factor ran out of steam, PC business dwindled and weaker demand for Apple slabs and IBM big iron came to bear.

The quarterly figures – based on sales-out data from the suppliers – collated by Context’s SalesWatch tracker, indicate turnover from the largest distributors in the region was up by 4.1 per cent to €13.4bn.

It was a mixed bag outing for distributors in specific countries across Europe; the UK and Germany declined 1.6 and 2.9 per cent respectively, but France, Italy, Spain and Sweden grew by double digits.

Software and licenses sales shrank by seven per cent across Europe and desktop computing fell by four per cent as the boost from the XP PC refresh activity in the same period last year was but a distant memory.

HP bore the brunt of the PC slump as sales fell 20.7 per cent in the region – overall the company grew total sales via distribution by one per cent in the quarter and remains the biggest vendor in the Euro channel.

Revenues for Apple, the next biggest seller in distribution, grew 18 per cent but this was compared to expansion of 37 per cent in Q1 ’14. This was “thanks to a drop in retail tablets”. Despite the slab slip, Apple increased its share of wallet among wholesalers from 11 to 12 per cent.

Apple noted in its second quarter results that iPad shipments fell 23 per cent year-on-year, though Mac and iPhone sales came to the rescue.

As for Big Blue, which transacts the majority of its business directly, sales via disties slid 14 per cent, as “plummeting server sales” reduced its overall share of distie sales to four per cent from five last year.

Lenovo, which has acquired IBM’s ailing x86 server line, was again the fastest growing tech player in the sector, up 37 per cent on the back of “notebook velocity” – its lappies grew 41 per cent, but tabs and desktop sales halved.

Overall, tabs sales via distribution declined in Europe by 17.7 per cent but notebooks were up 23.2 per cent and other positive moves came from data centre, security and networking segments – all climbed by healthy double digits.

Context CEO and co-founder Jeremy Davies said channel sales indicators”suggest growth will be “steady” in calendar Q2 but he sounded a note of caution.

“With so much of distribution business still reliant on PC revenues, softness in this sector prior to the launch of Windows 10 could depress sales and lower growth,” he said. ®

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