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UK Computer Hardware Market Insight

Industry Sector

Information Technology

Published

15 May 2012

Author

Mike King

Type of News

Market

The UK computer hardware market was valued at US$20.6 billion in 2010, increasing by 1.8% from 2009 revenue figures and the impact of the economic crisis during 2009. The UK computer hardware market is technology driven with consumers in the United Kingdom typically early adopters of new technology. The market for mobile computing is expected to continue to expand, driven by the wider availability of mobile and wi-fi broadband coverage in the United Kingdom. The computer hardware market in the UK is seeing increased sales in tablets and netbooks with increased demand for servers, driven by the growth in the UK data centre market and the increased demand for cloud computing and storage solutions.

The single largest purchaser of computer hardware is the UK government with total ICT expenditure totalling approximately US$28 billion each year. The ICT budget is under pressure from the requirement from government departments to lower budgets during this time of austerity.

The UK computer hardware market accounts for 4% of total world expenditure. The UK market is highly competitive with the Chinese and South East Asian manufacturers targetting the lower-end priced products. The majority of computer hardware products sold in the UK are imported. Future growth of the computer hardware market will be driven by mobile computing, cloud computing and energy efficient "green-tech" products.

Although the largest single buyer of computer hardware in the UK is the government, there is a move away from centralised procurement towards local purchase of smaller cloud-based applications and services. In September 2011, the US$20 billion centralised "national project for IT" for the NHS was adandoned with the local NHS Trusts now in charge of procurement.

In 2010, as part of the deficit reduction programme, the Cabinet Office secured a US$1.3 billion of contract savings from the government's largest 20 suppliers by demanding rebates and changes to the scope of services provided.

In 2010, sales of PCs increased by US$190 million with sales of peripherals increasing by US$94 million and sales of servers recording an increase of US$83 million. The UK peripherals market sales in 2010 increased by 1.2% in 2010, driven primarily by 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 in the UK increased by 2.8% in 2010 to account for 15% share of the total UK computer hardware market in terms of revenue.

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