Computer & Office Equipment Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 7,900 computer and office equipment distributors in the US serve as middlemen between manufacturers and retailers/resellers and end-users. Major revenue categories include computers, computer peripheral devices, office equipment, and computer software. Office equipment includes copiers, point-of-sale terminals (POS), automated teller machines (ATMs), cash registers, mailing machines and check handling machines. Companies may also provide services, such as repair, maintenance, technical support, systems assembly, systems integration, and training.

Rapidly Changing Technology

The IT arena is characterized by rapid change in technology and evolving industry standards and product specification requirements.

Price-Based Competition

Intense price-based competition in the information technology products and services market creates consistent pressure on margins.

Industry size & Structure

The average computer and computer peripheral distributor operates out of 1-2 locations, employs about 39 workers, and generates about $48 million annually. The average office equipment distributor operates out of 1-4 locations, employs about 33-34 workers, and generates about $17 million annually.

    • The computer and office equipment distribution industry consists of about 7,900 firms that employ about 298,600 workers and generate about $314 billion annually.
    • Computer and computer peripheral distributors account for 72% of firms and 88% of industry revenue.
    • The industry is concentrated; the top 50 computer and computer peripheral distributors account for about 76% of category revenue and the top 50 office equipment distributors account for about 77% of category revenue.
    • Large companies, which include Ingram Micro, Tech Data, and SYNNEX, may have international operations. Computer and office equipment manufacturers may have distribution operations.
                                      Industry Forecast
                                      Computer & Office Equipment Distributors Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Dec 3, 2022 - PC Shipments Decrease
                                      • US PC shipments decreased 12% during Q3 2022, according to market analyst Canalys. Desktop sales increased 1%, laptop sales decreased 14%, and tablet sales decreased 1%. Consumers are expected to cut spending on expensive tech this holiday season, and an expected slow educational segment recovery in 2023 points to the shipment declines continuing into the first half of 2023.
                                      • Workplace occupancy, an indicator of demand for office equipment, was 47.6% for the seven-day period ending on October 26, according to data gathered from swipes of access control cards in buildings with security systems provided by Kastle Systems. Occupancy reached 49% on October 12 after failing to break the 47.5% mark since at least August despite attempts by many organizations to bring employees back. The Austin, TX, metropolitan area had the highest occupancy for the seven-day period ending on October 26 at 61.8%. The San Jose, CA, metropolitan area trailed all others tracked at 39.9%.
                                      • Demand for computers and peripherals is decreasing after a pandemic-driven surge. Semiconductor manufacturer AMD warned that sales for the third quarter would come in about $1 billion below the already subdued forecast it issued in August. "The PC market weakened significantly in the quarter," AMD's CEO said. Technology giant Samsung also warned that third quarter operating profit would miss consensus forecasts. Intel is planning its first major layoffs in almost six years, according to Bloomberg News. The company warned in July that 2022 sales would be about $11 billion lower than it previously expected. Analysts are predicting a third-quarter revenue drop of roughly 15%. A slowdown in consumer spending amid high inflation are cited as key causes of slowing sales.
                                      • President Biden signed an executive order that is intended to quickly increase domestic production of semiconductors, strengthen semiconductor research, and extend US semiconductor design leadership. The order, which comes just two weeks after Biden signed the $280-billion CHIPS and Science Act into law, will establish a 16-member implementation steering council made up of cabinet secretaries and top White House officials from across Biden's national security and economic teams. The order also details Biden's six priorities for implementing the Chips and Science Act in the months ahead. Details include a series of factors that should guide the timely development and oversight of the private sector relationships required for the allocation of funding that is meant to enhance long-term economic and national security by increasing domestic chip manufacturing. The CHIPS and Science Act is a scaled-down version of previous bills. It offers more than $52 billion for US chipmakers and tax credits for domestic factories but isn't expected to affect production in the short term. Computer and office equipment distributors are likely to benefit from a more resilient technology supply chain, but experts say that it will take companies years to build new factories and upgrade facilities to tackle chip shortages and reduce heavy US reliance on imports.
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