GfK Retail and TechnologyGfK UK – PCA2008 PCA – GfK UK 30 th of October 2008.

GfK Retail and Technology

GfK UK – PCA 2008

PCA – GfK UK 30th of October 2008


GfK UK – PCA 2008 Contents – PCA

UK Economic Overview

The Corporate market

GfK Methodology

Independents, Resellers, and System Integrators




Corporate market

GfK Methodology

Independants, Resellers, and System Integrators

4


GfK UK - PCA 2008

Consumer Background Western Europe

• Banking panic = credit crunch and fears throughout Europe

• General Electronics slowing trends

• PCs and Notebooks in particular are still seen as “top of the mind” products however

• Massive price decline since week 1/1/08 taken as “granted”, more for less a marketing basis

• However, latest technologies are well received (dualcores, Graphics, Large screens, …)

• Channels confused on what to sell and how to sell

5


GfK UK - PCA 2008

The Media is full of doom and gloom helping to drive consumer sentiment

6


GfK UK - PCA 2008

0

2

4

6

8

10

12

14

16

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

%

Bank Interest RatesSet monthly by the MPC (Monetary Policy Committee)

Source: Bank of England

The Bank of England cut rates by 0.5% to 4.5% after a special meeting was held.

5.25%

15%

4.5%

7.5%

3.5%

7


GfK UK - PCA 2008

0

1

2

3

4

5

6

7

8

9

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

%

InflationConsumer Prices Index (CPI) – 12 month % change

The UK’s annual rate of inflation rose to 5.2% in September, its highest level since March 1992.

Source: National Statistics website: www.statistics.co.uk

8.5%

1.5%

5.2%

1.8%

8


GfK UK - PCA 2008

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

220000

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

£

House PricesAverage House Price

Source: Halifax

The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise. The ongoing pressures on householders' income, combined with the reduction in the availability of mortgage finance, however, mean that market conditions will remain challenging.

House prices fell by 1.3% in September. House prices are now 12.4% lower than the same period last year. UK average prices, at £172,108, have returned to where they stood in February 2006.

£70k

£84k

£172k

9


GfK UK - PCA 2008

0

2

4

6

8

10

12

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

%

UnemploymentAll Persons 16 and Over - 3 Month Rolling Average

The annual rate of growth in average earnings excluding bonuses was 3.6% in August 2008, down 0.1% from the three months to July.

The unemployment rate was 5.7% for the three months to August 2008, up 0.2% over the previous quarter and over the year. The number of unemployed people increased by 164,000 over the quarter and by 146,000 over the year, to reach 1.79 million.

The number of people in employment for the three months to July 2008 was 29.42 million, down 122,000 over the quarter but up 199,000 over the year.

4.9%

10.3%

5.7%


10


GfK UK - PCA 2008

0

10

20

30

40

50

60

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

£bn

Comparing Borrowing to SavingQuarterly Gross Borrowing Compared With Quarterly Gross Saving

Gross SavingGross Borrowing

Gross borrowing was £48.6bn greater than gross saving during Q1 2008, up from £44.5bn for the same period in 2007. This is an increase of 9.2%.

(excludes secured borrowing)

£16.2bn

£12.3bn

£36bn

£2.6bn

£51.2bn

£10bn


11


GfK UK - PCA 2008

-50

-40

-30

-20

-10

0

10

20

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

GfK Consumer Confidence IndexHeadline Index

First interest rate rise in 3 years

Index FigureAnnual Moving Average

The GfK NOP Consumer Confidence Index has shown a small improvement, rising three points to -32, but it is still 25 points lower than September last year.

Research carried out by GfK NOP on behalf of the European Commission

10

-10-9

-10

-32

-2 -4

Start of the credit crunch

-35

12


GfK UK - PCA 2008

Which Sectors Have Driven The Market Year To Date?

Year to Date % Growth In Value

£32.2bn

£2.9bn

£7.3bn

£2.5bn

£1.0bn

£0.5bn

£8.3bn

£2.6bn

£1.4bn

£5.8bn

TOTAL

Office

IT

Telecommunications

Photo

Automotive

DIY/Gardening

Major Domestic

Appliances

Small Domestic

Appliances

Consumer Electronics

Market ValueJan-Sep 2008

1.9%

0.7%

-3.8%

-2.5%

1.1%

0.5%

0.1%

7.6%

-1.1%

0.9%

13


GfK UK - PCA 2008

Which Sectors Have Driven The Market Month On Month?

Month On Month % Growth In Value

£3.3bn

£0.3bn

£0.8bn

£0.3bn

£0.1bn

£0.05bn

£0.8bn

£0.3bn

£0.1bn

£0.6bn

TOTAL

Office

IT

Telecommunications

Photo

Automotive

DIY/Gardening

Major Domestic

Appliances

Small Domestic

Appliances

Consumer Electronics

Market ValueSeptember 2008

-6.6%

-2.2%

-2.3%

-3.2%

-3.7%

-1.9%

2.4%

1.5%

-0.6%

-1.8%

14


GfK UK - PCA 2008

How Has The Total Durables Market Performed?


2.5% 2.7%4.5%

3.2% 4.3%2.4%

3.7%

-2.0%

2.4%0.0%

-0.9% -0.5%-1.8%

Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep

With 4 months without growth and declines in key gifting categories in the first 3 weeks of October, the outlook for Christmas does not bode well.

A drop in demand for high ticket items and large falls in average prices are the biggest factors behind the current falls.

A total Durable Goods market in decline since April 2008…

15


GfK UK - PCA 2008

How Has The IT Sector Performed?


Product categories included: slide 25

2.8% 2.5%

11.0%12.9%

9.6%

3.4%

6.6%

24.4%

6.3% 7.3% 6.8% 5.7%

1.5%

Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep

In the retail segment, the value of most IT categories is seen to decline in August (Monitors -29%, Printers -28%). The value growth of Mobile PCs has driven the market for 2008, however aggressive pricing has decreased the average price by 17% year on year. High sales of Mobile PCs are now coming in at under £300. This has reduced value growth to 6%.

Lowest growth this September for IT since 13 months…

16


GfK UK - PCA 2008

Total IT Great BritainTh. Sales Value GBP

Growth % (Year to Date):JanSept08 vs. JanSept07

© by GfK-RT, www.gfkrt.com RG1152551-Total MarketGrowth(E)Val 12M

Total 7,6

Desk PCs -4,2

Mobile PCs 19,6

Monitors -2

IT Storage 9PC Mini-Speakers 9,8

Comm. Dev -7,4

Comm. Cards 12,4PC Mice 12,9

Keyboards 6,8

Webcameras -2,8

MDD -4,1

MFD 2,9

Printers -15

Scanners 0,2

SOS/PDAs -41,4

Powermanagement 32,6

Electronic Assistants -1,5

Data-Video-Projectors 7,2

Box Software 5,8

TV Card/Tuners -4,9

Digital Photo Frames 49,4

September 2008Sales Value (Ths.) GBP

3.444

5.840

220.925

4.803

7.874

7.596

30.087

8.590

2.961

25.457

17.151

2.170

656

29.071

2.644

1.429

81.265

3.342

16.885

16.873

492

537.284




Corporate market

GfK Methodology


18


GfK UK - PCA 2008GfK Retail and Technology 10/2008

I T HARDW ARESales Units % ,Sales Value %SEP07 - SEP08

Great Britain

© b y G f K - R T , w w w . g f kr t . c o m R G 1 1 5 2 7 3 3 - S M L s iz e s

Sales U nits %

SEP07 OCT07 NOV07 DEC07 J AN08 FEB08 MAR 08 APR 08 MAY08 J U N08 J U L 08 AU G 08 SEP08

Sales Value %

SEP07 OCT07 NOV0 7 DEC07 J AN 08 FEB08 MAR 08 APR 08 MAY08 J U N08 J U L 08 AU G 08 SEP08

24

75,7

2 2,9

7 6,9

20,3

79,4

13,6

86,2

19,8

79,9

23,9

75,8

24

75,7

23,8

75,9

21,6

78,2

22,8

77

21,2

78,6

19,4

80,4

20,9

78,8

39,4

59,8

38,7

60,4

35,9

63,3

26,6

72,8

35,4

63,5

43,5

55,3

43,4

55,4

43

56

39

60,1

39,6

59,3

37,1

61,9

34,8

64,4

36,1

63

CORPORATE

CONSUMER

19


GfK UK - PCA 2008

Corporate market: size of Hardware devices UK Th. Units last 25 months

© by GfK-RT, www.gfkrt.com RG-1-Report 1

1.200

1.000

800

600

400

200

0

SEP06 OCT06 NOV06 DEC06 JAN07 FEB07 MAR07 APR07 MAY07 JUN07 JUL07 AUG07 SEP07 OCT07 NOV07 DEC07 JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08

846,3

981

920,6

809,4

923,7876,1

957,7

784,6

976,2

879,5 887,2

1.034

948,7

1.087

888,5

960,5

2006 2007 2008

20


GfK UK - PCA 2008

CORPORATE Channels

© by GfK-RT, www.gfkrt.com RG1152576-Business only Growth(E)Val 12M

Total 0,6

Desk PCs 3,5

Mobile PCs 5,3

Monitors 4,6

IT Storage 0,2

PC Mini-Speakers 13,4

Comm. Dev -4

Comm. Cards 1,3

PC Mice 0,3

Keyboards 2

Webcameras 29,4

MDD 12,5

MFD -2,2

Printers -8,1

Scanners -2,5

SOS/PDAs -44,3

Powermanagement 30,1

Electronic Assistants -20,1

Data-Video-Projectors 4,3

Box Software 10,7

TV Card/Tuners -0,9

Digital Photo Frames 14,8

September 2008Sales Value (Ths.) GBP

Total IT Great BritainTh. Sales Value GBP

Growth % (Year to Date): Jan Sept 08 vs. Jan Sept07

3.763

392

158

244

496

9.523

61.214

16.538

7.106

54.392

1.125

3.059

1.451

15.062

1.328

5.057

1.309

11.737

12.501

1

253

238.298

21


GfK UK - PCA 2008

CORPORATE Channels: segmentationGfK International definition

LARGE

SMALL

MEDIUM

More than 100 millions €

Less than 1 million €

Between 1 and 100 millions €

More than £ 70 millions

Between £0.7 and £70 millions

Less than £0.7 millions

22


GfK UK - PCA 2008

Corporate market: Split between Large, Medium and Small businesses UK Units % last 13 months – All Indirect Corporate Channels

10/2008

© by GfK-RT, www.gfkrt.com RG1152733-SML sizes

LARGE

MEDIUM

SMALL

SEP07 OCT07 NOV07 DEC07 JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08

59,7

35,1

5,2

61,5

34,6

3,8

56,4

38,2

5,4

53,8

39,8

6,4

59,4

35

5,6

52,3

36,4

11,3

57,4

32,4

10,2

54,8

33,5

11,7

56,6

34,3

9,1

62,1

30,8

7,1

57,9

36,2

5,9

57,7

36

6,3

55,9

38,6

5,5

23


GfK UK - PCA 2008

Product sales mix of IT specialists Corporate Split – Sales Revenue share in %

20% 20% 20% 19% 19% 22% 19% 22%

41%45% 43% 48%

40%

44%

28%

32%

39%34% 37%

33%41%

34%

53%46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2007 2005 2007 2005 2007 2005 2007

IT Hardware/Peripherals

Services

Software

Remark:Sales revenue shares in %

Corporate Total Small Medium Large

24


GfK UK - PCA 2008GfK Retail and Technology 10/2008

IT HARDWARESales Units %,Sales Value %JAN08-SEP08

Great Britain CORPORATE

© by GfK-RT, www.gfkrt.com RG-1-Report 1

Sales Units %JAN07-SEP07 JAN08-SEP08

Sales Value %JAN07-SEP07 JAN08-SEP08

11,8

9,3

14,6

9,6

10

8,4

8,1

5,6

6,72,5

3,4

21,81,8

13

10

13,6

10,6

10,4

8,1

7,5

4,95,4

3,6

3

1,91,51,6

8,9

27

9,2

3,9

25,7

6,9

7,61,3

1,7

1,5

8,9

28,4

9,6

2,8

26,4

6,6

6,81,7

1,7

1,3

STORAGEMobile ComputerMONITORSMEMORY MODULESDESK COMPUTERSPOINTING DEVCOMM.DEVICEKEYING DEVPRINTERSPOWERMANAGEMENTCOMM. CARDSMM-DEVICESMFDMULTIDISC DRIVEMINISPEAKERSVISUAL CAMSDIGITAL CAMERASHOUSINGSDATA-/VIDEO-PROSCANNERSOthers

25


GfK UK - PCA 2008

Key Points

Consumer Market:- Important development for “Free” laptop and Netbooks (already 8.7% of the volume in September)

- More and more “attach deals” (Box Software, Mice, USB key, …)

- Average price in decline: £372 for a Desktop, £394 for a Laptop and £216 for a Netbook this September 2008.

Corporate Market:- Focus on Technology and Services- Average price also in decline:£565 for a desktop and £531 for a Laptop this September.- Continuous growth in volume even if less important than the Consumer growth

Desktop: A market in decline on a long term, facing the cannibalisation of the laptop market but with month-on-month growth since January 2008 thanks to the BtoB market.

PC - Key Points

26


GfK UK - PCA 2008

PC Total: Growth by channelUK Volume % – all indirect channels – month vs month -21 evolution

28.2

44.9

31.0

8.7

22.5

24.7

12.3

15.3

24.322.9 23.3

25.3

39.9

31.3

37.8

42.6

22.0

36.3

32.5

19.617.7

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Jan07 Feb07 Mar07 Apr07 May07 Jun07 Jul07 Aug07 Sep07 Oct07 Nov07 Dec07 Jan08 Feb08 Mar08 Apr08 May08 Jun08 Jul08 Aug08 Sep08

TOTAL

CORPORATE

CONSUMER

First free laptop offer




Corporate market

GfK Methodology


28


GfK UK - PCA 2008

Retail Audit Methodology in 7 Steps

1. Define Product Groupse.g. PC’s

2. Define Channelse.g. Mass Merchandisers

3. Determine the universe e.g. Identify all the Mass Merchandiser stores in Italy

4. Create a representative sample of the universeUsing a universe matrix

6. Quality Check

7. Presentation of DataInformation is then provided to clients and retailers

5. Data is collected from retailers and coded

29


GfK UK - PCA 2008

MM = Mass MerchandiserCES = Consumer Electronic StoreCS = Computer ShopOER = Office Equipment RetailerTCS = Telecom Specialists

CONSUMER CHANNEL = MM + CES + CS + OER + TCSBUSINESS CHANNEL = IT RESELLER + IT MAIL ORDER

CONSUMER CHANNELCONSUMER CHANNEL

Book Stores, DIY,Supermarkets,

Car Accessory Shops

Makro, Tesco, Asda,Argos, Amazon,

Halfords,John Lewis,Play.com, Pixmania

…

MM CES CS/OER/TCS

End-User Tracked by GfK

Dabs4Work,Insight,

PC World Bus,Micro Warehouse,

W Store...

Centerprise,SCC, Elcom,

Computacenter,XMA...

DealersVAPS

IT RESELLE

R

BUSINESS CHANNELBUSINESS CHANNEL

IT MAIL

ORDER

Micro Anvika, PC World,Dabs.com, E-Buyer

Maplin, RS Components...

Staples, Supplies Team...

CPW, The Link, Phone 4U

Universe: 2539Universe: 5503Universe: 15130 Universe: 6936 Universe: 1530

Computer Specialists /Office Equipment Retailers /

Telecom Specialists

Comet, Currys, Currys Digital,Empire Direct, Richer Sounds

...

Jessops, Photo Optix...

Electrical Independents andMultiples, Photo Specialists

GfK UK – IT Channel Structure

30


GfK UK - PCA 2008

GfK Tracked IT Product Groups

PC

Scanners

Communication Devices

Visual Cams

NG Box Software

Electronic Assistants

IT Storage

Housing

Minispeakers

Keying Devices

Media Gateway

Digital Photo Frames

Monitors

Pointing Devices

Projectors

Multimedia Cards

Memory Elements

Power Managemen

t

Gaming Devices

Multi Disk Drives

Small Organising Solutions

Communication Cards

Smartphones




Corporate market

GfK Methodology


32


GfK UK - PCA 2008

RESELLERRESELLER

ADSL, Gadgets, PC,Peripherals, Software

Scan, Overclockers,Cancom, Stuff

ComputerLand, Ebuyer

Consumer Public Sector Corporate

End-User Tracked by GfK

OEM, Licence, Retail,Download

OEM, Retail, LeaseBundles

Hardware

DISTRIBUTIONDISTRIBUTION

Software

Computercenter, Basilica,XMA, Ramesys e-Business,

Lynx technolgy, Viglen,Greymatter

Universe: no.?Universe: no.?Universe: no.? Universe: no.? Universe: no.?

Infastructure, ASP,Managed Services

Compusys, Brightminds,Granada Learning, REM,

RM, Softcat,The Consortium, Antec Int

SLA’s, Work stations, Network, Licencing

GfK UK – IT Channel Panel Future

Product Info.

33


GfK UK - PCA 2008


Splitting the Channel Into Sectors• Adds increased value to the reports for both clients and suppliers• Depth in reporting so trends can be analysed in sectors not just

categories• Changes in business focus needs to be identified

Sourcing product definitions• Proactive research reduces weaker areas in reporting• Improves non boxed coverage• GfK can identify new opportunities• Wider market awareness

34


GfK UK - PCA 2008


Data Exchange• Sending Weekly / Monthly Sales Data to GfK• GfK give

• Fit 4 IT news• Topview Product Reports• Store Audit (where qualified)

• Summary Economic Overview• Chart Pack (where qualified)

• Detailed reports and presentations available as per member rate card• Partly Subsidised PCA Membership

35


GfK UK - PCA 2008

…Thanks for listening

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