07/08/2015 //
With the current “Greek Crisis” threatening EU stability and further manufacturing declines in China, S. Korea & Taiwan there are certainly global economic concerns.
Source: | www.bls.gov/news.release/empsit.a.htm |
www.conference-board.org | |
www.markiteconomics.com | |
www.economist.com |
Markit Economics just released its PMI leading indicators for June.
Source: www.markiteconomics.com
The Department of Commerce released it full report on May shipments, Phoenix Contact and inventories for U.S. manufactured goods.
Source: http://www.census.gov/manufacturing/m3/index.html
IPC announced the May findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. Sales were down slightly but Phoenix Contact were up. The 3-month average book-to-bill ratio held steady at 1.02.
Total North American PCB shipments decreased 4.2% in May 2015 from May 2014, and year-to-date shipment growth declined to -1.8%. Compared to the previous month, PCB shipments were down 3.5%.
PCB bookings increased by 10.4% compared to May 2014, returning the year-to-date order growth rate to positive territory at +1.3%. Phoenix Contact increased 0.9% in May compared to the previous month.
"North American PCB sales continued below last year's level, but Phoenix Contact resumed positive growth and the book-to-bill ratio remains positive for the eighth straight month," said Sharon Starr, IPC's director of market research. "This indicates the likelihood of strengthening sales growth in the second half of this year," she added.
Source: www.ipc.org
Worldwide IT spending is on pace to total $3.5 trillion in 2015, a 5.5% decline from 2014, according to the latest forecast by Gartner, Inc. Analysts attribute the decline to the rising U.S. dollar. In constant-currency terms, the market is projected to grow 2.5%. In Gartner's previous forecast in April, it had forecast IT spending to decline 1.3% in U.S. dollars and grow 3.1% in constant currency.
"We want to stress that this is not a market crash. Such are the illusions that large swings in the value of the U.S. dollar versus other currencies can create," said John-David Lovelock, research vice president at Gartner. "However, there are secondary effects to the rising U.S. dollar. Vendors do have to raise prices to protect costs and margins of their products, and enterprises and consumers will have to make new purchase decisions in light of the new prices."
Communications services will continue to be the largest IT spending segment in 2015 with spending at nearly $1.5 trillion. However, this segment is also experiencing the strongest decline among the five IT sectors. Price erosion and competitive threats are preventing revenue growth in proportion to increasing use within most national markets.
In the device market, mobile phones continue to be the leading segment, with growth in Apple phones, especially in China, keeping overall phone spending consistent. However, overall smartphone unit growth will start to flatten. The PC and tablet market continues to weaken. The expected 10% increase in average PC pricing in currency-impacted countries is going ahead, delaying purchases even more than expected. Excessive PC inventory levels, especially in Western Europe, need to be cleared, which will delay Windows 10 inventory in the second half of the year.
Within the data center systems segment, storage and network markets are both expected to see weaker growth in U.S. dollar terms as a result of the appreciation of the U.S. dollar. Enterprise budgets for data center systems in local spending are expected to remain stable for the year, with users expected to extend life cycles and defer replacements as a means of offsetting the price increases. The overall near-term data center weakness is slightly offset by a more positive outlook for the server market. The server market is benefiting from a stronger-than-expected mainframe refresh cycle, as well as increased expectations for hyperscale spending.
Enterprise software spending is forecast to decline 1.2% in 2015, with revenue totaling $310 billion. Gartner analysts said many software vendors will try not to raise prices because software as a service (SaaS) is about market share, not profitability. Raising prices could take software vendors out of a sales cycle, and these vendors don't believe they can afford to lose a client.
IT services spending in 2015 is projected to decline 4.3%. Gartner expects modest increased spending on consulting in 2015 and 2016, as vendors have demonstrated their ability to stimulate new demand from buyers looking for help with navigating business and technology complexities, particularly related to building a digital business. However, the forecast for implementation services has been slightly reduced. Increasingly, buyers prefer solutions that minimize time and cost of implementation, driving demand for more-efficient delivery methods, out-of-the-box implementation, and lower-cost solutions.
"IT activity is stronger than the growth in spending indicates. Price declines in major markets like communications and IT services, and switching to 'as a service' delivery, mask the increase in activity," Mr. Lovelock said.
Source: www.gartner.com
Smartphones first accounted for more than 50% of total quarterly cellphone shipments in 1Q’13. In 4Q’15, smartphones are forecast to reach 435 million units or 80% of total cellphones shipped according to data in IC Insights. On an annual basis, smartphones first surpassed the 50% penetration level in 2013 (54%) and are forecast to represent 93% of total cellphone shipments in 2018.
Samsung and Apple dominated the smartphone market in both 2013 and 2014. In total, these two companies shipped 457 million smartphones and held a combined 47% share of the total smartphone market in 2013. These two companies shipped over 500 million smartphones in 2014 (503.9 million), but their combined smartphone unit marketshare dropped seven percentage points to 40%. It appears that both Samsung and Apple are losing smartphone marketshare to the up-and-coming Chinese producers like Xiaomi, Yulong/Coolpad, and TCL.
In contrast to the weakening fortunes of Nokia, BlackBerry, and HTC, 2013-2014 smartphone sales from China-based Lenovo (which acquired Motorola’s smartphone business from Google in October of 2014), Huawei, Xiaomi, Yulong/Coolpad, and TCL surged. Combined, the six top-10 China-based smartphone suppliers shipped 359 million smartphones in 2014, a 79% increase from the 201 million smartphones these six companies shipped in 2013. As a result, the top six Chinese smartphone suppliers together held a 29% share of the worldwide smartphone market in 2014, up eight points from the 21% share these companies held in 2013.
In early 2015, there were numerous reports of slowing in the Chinese smartphone market.
Since most of the Chinese smartphone producer’s sales are to Chinese customers, this slowdown became evident in their 1Q’15 smartphone sales figures. In total, the top six China-based smartphone suppliers shipped 83.4 million smartphones and held a 25% share of the 1Q’15 worldwide smartphone market, down four points from their 29% combined marketshare in 2014.
Chinese smartphone suppliers primarily serve the China and Asia-Pacific marketplaces. Their smartphones, unlike those from Apple, Sony, and HTC are low-cost low-end handsets that typically sell for less than $200. In some cases, smartphones sold by the Chinese companies have been known to sell for as little as $50.
With much of the growth in the smartphone market currently taking place in developing countries such as China and India, low-end smartphones are expected to be a driving force in the smartphone market over the next few years. IC Insights defines low-end smartphones as those that sell for $200 or less and high-end smartphones as those that sell for greater than $200.
Source: www.icinsights.com
Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.
Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.
He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.