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Canada Technology Distribution: Q3 2017 Update

By Ali Naqvi, Director, Canada Technology

The weather has started to cool down, but the Canadian IT hardware distribution market as tracked by NPD showed no sign of cooling down — September marked the end of the third quarter with +8 percent revenue growth. This brings our cumulative January to Sep 2017 revenue number to +9 percent, which is a significant growth number compared to growth in some other industries.

A number of factors contributed to this growth. The distributors are continually focusing on providing value to the channel, and this is improving the vendor community’s trust that the distributors are handling their business. This growth also follows a higher trend we’ve recently seen in the Canadian economic indicators.

Categories instrumental to this upward trend include PCs, servers, and large format displays, among others that have shown double-digit growth. The growth in PCs and servers is having an impact on the rise in other smaller categories, like notebook accessories, memory, solid state drives, networking devices, and monitors, to name a few.

Among the top 20 categories that brought in the most revenue is large format displays, which showed the greatest growth at +42 percent over last year. The use of these screens is spreading in almost all small business spaces, including restaurants, doctors’ offices, retail stores, and many public places like libraries, community centers, sports arenas, corporate offices, office tower lobbies, and exhibitions. Businesses are using them to communicate key information and marketing messages to their clients and visitors alike. That’s why demand for larger and better resolution screen is on the rise. Screen sizes 55” and above account for 58 percent of total dollars in this category. The most common screen size, 55”, contributed 21 percent of total category revenue. Notably, the average selling price of 55” and larger screens rose by +7 percent, which goes to show that it’s not about the lowest price, but better quality of product.

Every quarter in 2017 has grown over the same quarter previous year; this trend would have us believe that Q4 2017 should also beat last year’s Q4 results. However, Q4 2016 was one of the best fourth quarters the Canadian market ever experienced — in fact, it was better than Q1 2016, and traditionally we know Q1 is always the biggest quarter. It will be interesting to see whether the growing trend of major categories like PCs, networking, storage, and related categories will continue, beating Q4 2016 to end the year on a high note.

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