Karlsruhe, 07/07/2020 – Stock levels of home office equipment are stabilising again after the peak of the corona crisis, whereas other products are having to deal with some unique difficulties. Particularly PC systems, a product category that is clearly at a disadvantage in the home office when compared to light and flexible notebooks, are currently in low demand. As a result, stock levels are rising steadily – which is noticeably affecting prices.

IT hardware stock levels looked worrying back in March: notebooks were almost sold out, while headsets, monitors and webcams were in equally high demand. Products required for the basic equipping of a home office were selling fast.

In the last update in mid-May, the evaluation of stock levels on the ITscope platform showed that stock levels are increasing again and the situation is normalising. However, at this point it also became apparent that one product category in particular is having to overcome completely different hurdles.

Decreasing demand for PC systems

Stock levels were moving in the opposite direction for PC systems, a product category that is less suitable for home office. While stocks levels of other products were quickly reducing, PC system stock levels rose. As could already be foreseen in May, it is now becoming increasingly clear that prices are falling due to the rising stock levels. Not only is there hesitancy in undertaking IT infrastructure projects due to the current economic situation. It has also become clear during the corona crisis that notebooks should be part of the standard inventory in the future, in order to guarantee increased employee flexibility.

“The current situation gives us a glimpse into the future: we suspect that PC systems will increasingly disappear from the office sector and will be replaced by notebooks. During the corona crisis, many companies have realised how important flexible working is and want to support this with the appropriate equipment”, explains Oliver Gorges, sales manager at cop software + services, subsidiary of ITscope GmbH.

This circumstance is also confirmed by the preliminary figures of the ITscope market barometer for the 2nd quarter of 2020. Seemingly, PC systems are becoming slow sellers – and no signs of improvement can be seen yet.

Full warehouses ensure falling prices

A comparison of figures for the 1st and 2nd quarters of 2020 shows a clear decline in price. While the average Wholesale Selling Price (WSP) for the top 10 products of the current quarter is slightly above €500, the average WSP of the same products in the previous quarter was noticeably higher at €565. On average, the price fell by 10 percent, while for some products it even fell by more than 20 percent.

A comparison with last year’s second quarter figures shows that the prices of individual products in the then top 10 also fell in the period from March to July – but to a much lesser extent. A seasonal phenomenon can therefore not be assumed. This is also made clear when individually looking at the current top 10 PC systems.

Top products paint a clear picture

The Lenovo ThinkCentre M720q 10T7 (item no. 10T700BTGE), which has been listed on ITscope since August 2019, is a particularly vivid example for this: while the PC system’s WSP was subject to only minor fluctuations up to April, it has steadily decreased since then. It is now hovering at around €490 – previously it was at a steady €530. The reason for this seems to be the increasing levels of stock: while a maximum of 5.500 units were previously reported by the distribution department on ITscope, the current peak value is almost 20.000 units.

Price/stock level/status history Lenovo ThinkCentre M720q 10T7 (item no. 10T700BTGE), October 2019 to July 2020

A very similar situation can be seen with the PC systems in 2nd and 3rd place of the ITscope market barometer. Second place is taken by the HP ProDesk 400 G6 (item no. 7EM13EA#ABD), which has been listed since July 2019, and has the same combination of full stocks and falling prices. Although the total of almost 5.500 units in stock is lower than for the Lenovo ThinkCentre M720q 10T7, the stock level has almost doubled in comparison to pre-corona values. With this oversupply, a falling WSP is the logical consequence. Even though the WSP trend for this PC is not quite as consistent as for Lenovo’s first-placed system, and is subject to stronger fluctuations, the WSP in Q4 2019 and Q1 2020 (before corona) was never as low as the current price of around €500.

 

Price/stock level/status history HP ProDesk 400 G6 (item no. 7EM13EA#ABD), October 2019 to July 2020

In addition, the HP ProDesk 400 G6 has a sales trend of zero between January and March – as the warehouses were empty. A possible explanation for this could be the supply bottlenecks that resulted due to the lockdown in China. In March, the sales trend briefly spiked as the product became available again. After that, however, sales figures rapidly fell again and stocks remain full. It appears that lower prices are now expected to counteract the falling sales.

The Dell OptiPlex 3070 (item no. JX26T) in 3rd place, which has been listed on ITscope since July 2019, is also struggling with falling prices. At more than 3.000 units, stock levels are comparatively high and the WSP of about €450 is correspondingly low.

 

Price/stock level/status history Dell OptiPlex 3070 (item no. JX26T), October 2019 to July 2020

How will the situation develop? Will the changes be so far-reaching that a sustainable rethinking will take place, towards a flexible working world that is spatially independent? Or is this just a unique situation and the demand for PC systems will rise again as soon as the economic downturn eases? It remains to be seen how the demand for these PC systems will develop.

In the market barometer published every quarter, ITscope retrospectively analyses the three million IT products listed on ITscope.com to see how many times each product was viewed on the platform. This provide a well-founded insight into the category-specific product interest of IT resellers.
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