Following a decline in 2009 as a result of the economic crisis of 2008, the UK market for hardware and peripherals recovered in 2010 and computer hardware sales increased by 1.8% to $20.6bn. U.S. suppliers are well received in this market, with major U.S. brands among the top suppliers of both computers and peripherals in the UK. The market is open and sophisticated and UK consumers and business are typically early adopters of new technology. To succeed, U.S. suppliers must demonstrate a clear product innovation or price advantage.
The market for mobile computing continues to grow, driven by the wider availability of mobile and wi-fi broadband and the increasing trend towards tablet and netbook usage. The market for servers is also increasing, driven by the growth of the UK data center market as a result of higher demand for outsourced and cloud based IT solutions.
The UK government is the single largest buyer in the UK, with total annual spending on all ICT products and services of $28 billion. However, this is expected to decline year on year to at least 2015 as the coalition government drives through its deficit reduction program.
To be approved for sale in the UK, U.S. products must be compatible with the UK mains electricity system and must comply with UK environmental rules and EU regulations.. For small and medium sized businesses, the fastest and most cost-effective route to market entry is typically via partnerships with local ICT distributors and re-sellers.
The UK accounts for around 4% of the total global market demand for computer hardware and peripherals. The UK market is open and competitive, with continuing high demand for computer hardware and peripherals from U.S. manufacturers, despite increasing competition from manufacturers in China and South East Asia, who tend to dominate the lower-price end of the market. Manufacturing of computer hardware and peripherals is not a major local industry in the UK and the bulk of products sold are imported from abroad. Future growth in the UK market will be driven by increasing demand for mobile computing, cloud computing, and energy efficient “green-tech” products. The UK government represents the single largest buyer in the market and, due to a recent change in its IT procurement strategy, there is likely to be a trend away from large scale, enterprise-wide, capital intensive procurements, towards the local purchase of smaller, cloud-based applications and services. One example of this is the UK government’s abandonment in September 2011 of its $20bn centralized “national project for IT” for the National Health Service (NHS) in favor of handing back responsibility for purchasing IT to local NHS Trusts. The UK government is focused on reducing its spending on IT as a key strand of its overall deficit reduction program. In 2010, the Cabinet Office secured $1.3 billion of contract savings from its largest 20 suppliers by demanding rebates and changes to the scope of services provided.
In 2010, the UK computer hardware market recovered from the 1% decline it experienced in 2009 as a result of the global recession in 2008. In 2010, sales of PCs increased by $190m, sales of peripherals by $94m, and sales of servers by $83m.
Growth of sales in the PC market was driven by the trend towards mobile computing, with sales of portable PCs increasing by 7.1%, while desktop sales declined by 5.6%. The growth of mobile computing has been stimulated by the substantial increase in the number of wi-fi hotspots throughout the UK. In addition, the introduction of various tablet computers by all the main PC manufacturers, triggered by the launch of the Apple iPad in 2010, is likely to significantly accelerate the existing trend towards mobile computing and away from desktop computers over the next three years.
The UK peripherals market grew by 1.2% in 2010. This was driven largely by growth in demand for Bluetooth devices, external storage devices and web cameras. Sales of routers and switches declined by 1%, as did sales of printers and monitors.
Sales in the server market, which represents 15% of the total computer hardware market, grew by 2.8% in 2010. This was driven by an upturn in investment in business computing, as well as the continued development of the cloud computing market. The top three server suppliers in the UK are all U.S. owned: IBM, HP and Dell.
Portable computers and peripherals – notebook and tablet computers and accessories. Data storage devices – flashdrives, external hard drives etc, especially with encryption capability. Servers for cloud computing – to support SAAS applications and distributed networking. Energy efficient products – to help mitigate the financial impact of the UK government’s carbon levy which it has been forecast could increase the energy costs of running data centers by up to 10%.