Canadian spending on technology products is still recovering, according to data from NPD Group, a Toronto-based market research firm. However, there are some emerging areas of strength and interesting trends, particularly in the IT space, that channel partners should be targeting.
According to NPD’s report for the first four months of 2010, Canadians spent $3.2 billion on technology products, down two per cent from the same period last year. While revenues were flat in the consumer electronics space and down sharply in video games, the IT segment actually saw revenue growth. While Canadians actually purchased six per cent fewer IT products – just over 27 million in the reporting period – an increase in the average price per unit led to revenue growth.
Darrel Ryce, director, information technology & entertainment with NPD, said within the IT space the notebook market remains strong, but a key related growth area has been hardware accessories to go with those notebook purchases, as well as more fashionable accessories to make mobile products more of a personal statement. The accessories market was up by 20 per cent, year over year, helping drive revenue growth.
“Hard drives are popular; we’re seeing the consumer truly understand the need to have that extra place to put their important materials,” said Ryce. “The PC now is about your music, your pictures and your communications, and people have heard too many stories of friends or neighbors that have lost everything in a PC crash.”
In the desktop market, an interesting shift is taking place. NPD’s data shows that, after many months of consecutive declines, desktop volume returned to small but positive unit and revenue growth around holiday 2009, a trend that has continued to ramp-up into 2010. And Ryce said the growth isn’t coming in the low-end of the desktop market, where buyers are actually losing interest. It’s coming in the higher end.
“Consumers are spending more money for their desktops, which speaks volumes about consumers becoming more educated and having more understanding of what their needs are, and knowing the low-end, low-priced desktops just won’t get them what they want,” said Ryce.
Gaming PCs are strong sellers, along with performance PCs and media hubs, he said.
On the downside, Ryce said it appears the monitor market has plateaued for the time being. After strong revenue and unit growth as people transitioned from old-style CRT displays to new LCD models, the transition appears to be nearly at 100 per cent. Combined with the longer replacement cycle for a monitor and strong pricing pressure, this space declined in the reporting period. NPD also observed a decline in media CDs and DVDs in favour of flash memory, and also because of people choosing to stream media instead of burn it to a disc.
While the printer hardware market is declining, Ryce said a glimmer of hope for recovery in the struggling retail space is printer consumables registering small increases, but increases nonetheless.
In the consumer electronics segment, the growth was led by next-generation DVD players, televisions and camcorders, where unit sales were up 56 per cent, 20 per cent and 12 per cent respectively. Sales in the small domestic appliance segment were flat. And the video game console market saw a seven per cent decline in unit sales and a 15 per cent drop in revenue, which could signal Canadians are ready for the introduction of next-generation hardware.
Follow Jeff Jedras on Twitter:@JeffJedrasCDN.