Brexit jitters fingered as UK consumer PC sales collapse Brits may have caught the pre-Brexit jitters in the first two months of this year, as the amount of PCs sold to retailers crashed, according to shipment figures compiled by channel number-cruncher Context. UK PC volumes via distributors fell 7 per cent to 538,000 for January and February: business machines went up 4.5 per cent …
Bugger all to do with Brexit and lots to do with people don't need to upgrade and when they do it will be when CPU manufactures have properly sorted out their current security issues in the silicon and not just had a sticking plaster thrown on the problems. Until then, cash firmly stays in wallet and we can make do and mend.
seems to be SOP these days when the real reasons are even more unclear and uncertain.
TBH, there is little need to upgrade these days. Intel has Fsck'd around for the last 5 years and not really given us any major leaps in CPU performance apart from stuffing a few more cores onto the die.
Replacing the rotating rust HDD with a SATA SSD or even better an M2 SSD (if possible) makes more of an improvment than a new CPU or shed loads of RAM to most workloads.
I don't think Brexit is an excuse in this case. It's clearly stated in the article that demand in UK has collapsed far more than in EU, even though level of computing penetration / technological level is identical between UK and rest of EU.
Frankly, though, I am surprised that there are so much less sales. I would think that the fear would be for parts or whole systems to be more expensive after Brexit and for sales to pick up just before. Or maybe that's just for consumers, and the drop is due to business uncertainty around Brexit, seeing that businesses are probably the largest driver of new PC sales
"Frankly, though, I am surprised that there are so much less sales. "
I'm not. The refresh rate for PCs inc. laptops and servers has been getting longer and longer over at least the last 10 years or so. They used to get replaced about every three years. Then four years. Five year replacement cycles are pretty much the norm now and some places are moving to six years. In local councils, many desktops have been replaced with laptops as laptop prices have dropped and where a laptop is more useful for those staff. Then there's the staff where a laptop was the only practical option now being replaced with much cheaper tablets where that is now a viable option.
The number of devices is up, but there has been a shift change in what those devices are.
"Bugger all to do with Brexit "
how comes the rest of western europe hasnt had the 25% drop then?
I *am* puzzled about what these people are thinking....
Things being smoother , the economy booming , better computers ....
all seems like the Least Likely outcome of whatever flavour of Brexit actually occurs.
There will be a drop when it is officially announced that France and Germany have joined Italy in recession. budget will be cut right back (if they have not already been chopped to the core) so that that all so important dividend can be kept and the CEO and pals can trouser a stonking great bonus before running for them there hills...
Yep.
Rising prices, falling wages and endless austerity for the many at the benefit of the few have a much bigger impact on consumer confidence than effing Brexit.
The second problem is that both companies and individuals alike can't see the point of the latest shiny when it's only marginally better than what they already have
Why not ask people in Spain, Greece or Italy why they're not buying new pc's?
I did, once the vote was leave I cleared all outstanding debts and started pushing stuff into savings. I held off a lot of big purchases and reined in general spending.
The good news is that I should be able to survive a pretty good economic storm. A side benefit is that if there is less trouble than expected I can almost afford to retire. If I didn't enjoy the fun of making things work in space I probably would do so within 2 years.
In Germany the purchasing managers index has been down recently and consumer confidence was down last month after a sustained high. I've always thought that business really drives the PC cycle. There will be a small rise in busniess as companies prepare to replace older kit with Windows 10 compatible stuff this year but my guess would be that was mostly budgetted for last year.
Western Europe consumer PC sales fell 9% vs 25% in the UK, with the blame falling on mobile devices and a lack of innovation. Given the average sale prices also increased across the region, cost is likely to be a factor in the fall as well.
It would be interesting to see a breakdown by Western European country - I wonder if some of the more traditional markets saw much larger declines due to the impact of high end mobile devices while some of the less saturated consumer PC markets display positive growth and help the Western European average. i.e. in 2018 Poland was reporting growth while Swedan/Italy were reporting significant falls.
I'm not excluding the impact of Brexit causing a UK PC sales slump - it's likely based on 4.5% UK business sales growth vs 6% Western European sales growth with similar drivers, it's just the picture is less than complete on the consumer side.
Apparently the Japanese shelving their plans for UK production of various models, as well as JLR and others moving production to the EU has nothing to do with brexit either. It's because of, er... diesels.
And yet I live just south of Lisbon, and there is a huge VW plant in Palmela which makes some Seat and VW models. And that's going to double production over the next couple of years, and is producing both the Sharan and T-Roc, which both come with several diesel options as well as petrol.
And you'd kind of think that VW would have been impacted by the diesel controversy rather more than Nissan, Honda and JLR? But here they are, ramping up production, including of diesels.
And you'd kind of think that VW would have been impacted by the diesel controversy
VW might not have any money left (or exist at all) by the time all the lawsuits have been settled from the diesel controversy, this is still rumbling on through courts around the World.
https://www.bbc.co.uk/news/business-47578888
https://www.bloomberg.com/news/articles/2019-03-15/vw-sued-by-sec-for-misleading-bondholders-on-diesel-cheating
"And you'd kind of think that VW would have been impacted by the diesel controversy rather more than Nissan, Honda and JLR? But here they are, ramping up production, including of diesels."
Don't forget the new EU-Japanese trade deals that come into place in 2019 that starts to remove tariffs, making it more economic for Japanese companies to manufacture in Japan rather than abroad:
https://www.reuters.com/article/us-eu-japan-trade/eu-japan-free-trade-deal-cleared-for-early-2019-start-idUSKBN1OB1EN
Combine that with falling diesel sales (https://www.thisismoney.co.uk/money/cars/article-6564055/UK-new-car-sales-record-biggest-fall-financial-crisis.html) in the UK and stagnating vehicle sales across Europe and existing manufacturers are looking to consolidate rather than expand.
"Wouldn’t France be most impacted by falling diesel sales?"
Possibly but I am unsure what regulations France is bringing in for older diesel vehicles.
Since the VW scandal there have been rumours of increased diesel taxes and London has introduced the ULEZ significantly increasing charges for diesel vehicles in central London in 2019 and within inner London (i.e. bounded by the northern and southern circulars) by 2021.
UK diesel sales have declined significantly (https://ichef.bbci.co.uk/news/624/cpsprodpb/15E67/production/_105130798_chart-diesel_cars-6mfu4-nc.png) reaching -33% in 2018.
I suspect that the real issue is that the re-sale market for pre-Euro6 diesel cars is effectively dead. While scrappage schemes may help vehicle owners, I doubt the owners will buy another diesel car.
If you see a drop in sales in anything across the EU that's one thing, if you see sales remaining stable but only dropping in one country then it's another. So in this case you look at what's going on in the country that has the anomalous drop and look to see if there is anything that might explain it. Pretty much everything in our news is related to Brexit so it's not a massive leap of the imagination to immediately blame that.
You might well then do further research and interview someone like me who says:
I work for a global company who is obliged to keep large amounts of HR and financial data as well as our email servers within the EU, if we leave the EU then there is a big chance all of that and my job will have to relocated back into the EU, so no, my credit card is staying in my wallet and my laptop is going to have to keep going until I know what the future holds.
I'm not buying any more PC's i'm swimming in devices at home.
2 Windows desktop PC's
10 Windows laptops
1 Linux laptop
4 iPads
4 Macbooks
1 Mac Mini
Plus a few shitty Netbooks
They all work, it is NOT Brexit, it's i don't need anything else. I am not alone, everyone i know has endless devices in the home, even my Nan has 2 iPads and 1 laptop. Yeah i would love a new Macbook Pro, but i am not spending £2500 just for the sake of it.
Ever tried to sell a used PC? Not saying it should be, but they devalue in price so fast it's nuts.
I see reasonable laptops on ebay for << $100. May as well keep a backup if that price (minus shipping expense and other fees) is all you're gonna get.
Maybe those few who do sell and those few buying them super cheap (I have my eye on a Dell i-3 laptop machine priced at $20 w/o a drive - half the price of a raspberry pi, but with a keyboard, and display) are why there are fewer new sales - maybe the Brits are smart! And this would also account for flash sales not tanking as badly as well.
A lot of this is like stock market pundits. Every single day if there is movement, they have to come up with a "because" - which is often whatever would most confirm their audience' confirmation biases, and which certainly has little to no connection to facts (else they'll all be too rich from trading to bother with talking in a studio). It's the same argument as "why don't psychics always win the lotteries".
I have people come in to see if our computer company needs to buy older (6+ year old) used computers "for parts, etc."
I tell them that what they are offering me is a $50 computer. If it is fully operational and they pay me $50, I will take it. Of course I don't want the computer anyway, but sometimes it is fun just to see their reaction.
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"But in the UK we are hearing [from distributors that supply retailers] of the additional impact of low consumer confidence, which is partly driven by Brexit uncertainty,"
The author got it from a Senior Analyst, who got it from a distributor, who got it from a retailer... So we are getting a 4th hand opinion on what is going on in PC sales - and even then I wonder how the retailers actually know why someone didn't buy a PC.
Most of them, in fact, can't even be arsed to talk to prospective customers who do want to buy.
They might just as well have blamed the Russians, for all their opinion is worth.
Well if you expect the £ to fall in value after brexit then you're better off buying foreign stuff now - as far as I can see there should be no change in the UK tariffs on computers for the "no deal" option. There is also an argument that UK savings may be slightly less safe after brexit, depending on whether the government maintains the 85K Euro 'guarantee' .
There's very little to distinguish between the consumer-focused offerings, neither between themselves nor the PCs consumers already have.
Windows used to provide some interest every few years, as new versions came out, but that has all faded. Now it's just biannual feature updates that inspire dread rather than interest in the consumer.
What it needs is something new: I'm quite taken by the capabilities of the Nexdock (see reg article "https://www.theregister.co.uk/2019/03/25/nexdock_2/"). I've always wanted to be able to shove HDMI into a laptop so that I could use it to front a headless PC (or Pi), so if any manufacturer comes up with a laptop that additionally incorporates the Nexdock features and allows dynamic switching back-and-forth between both modes, I would be more than interested.
Until then - meh.
Simple - the average consumer in the UK, 99% of their PC activities can be done on their smartphone. If they already have an aging pc/Mac that still works when they turn it on once a month then there is no compelling reason to buy new.
From my experience as a business user my laptop is over 5 years old and has had few refreshes in memory and new SSD - still going strong and it gets punished on a daily basis. I'd be upgrading for vanity purposes and it wouldn't be anyway until the new Intel processors are out
How do they count UK consumer PC sales?
If someone orders an ultracheap no-name brand PC / tablet direct from a far-east retailer, does that count? What about a new laptop bought on ebay, sold privately by someone from Eastern Europe who's making a bit of money on the side? Do most people still buy at PC World, or do they just go there to try out, then look online to buy for less?
Commodity PCs have incredibly slim margins, so profits are down considerably.
Remember that revenue is mere vanity, profits matter and cashflow is king.
If you only make £1 on each sale, selling 100 units at £4 is far worse than selling 200 units at £2, even though the revenue is the same.
"If you only make £1 on each sale, selling 100 units at £4 is far worse than selling 200 units at £2, even though the revenue is the same."
wait , what?
Surely the price the unit cost to make comes into play?
Lets say its £3
100 at 4 means u made 100
200 at 2 means you lost 100
lets say its £1
100 at 4 means u made 300
200 at 2 means u lost 200
lets say its £10
100 at 4 means u lost 600
200 at 2 means u lost 800
£1 on each sale => then 100 sales @ £4 = £100 profit or £400 turnover,
where as
200 units @ £2 = £200 profit on the same £400 turnover.
The first line impliesthe machines cost £3 each
so if you sell 200 at 2 you lost £200
Turnover means nothing.
You buy a supercomputer for £1m
you sell it for same.
= £1m turnover , zero profit.
Seems this sounds familiar as with a few years ago something similar happened. This is dip is usually from the idea that PC marketers try to convince the consumer that they need to swap every one or two years, but then the consumer tries to make it last four or five years before purchasing a new one.
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