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EXECUTIVE SUMMARY

INTRODUCTION

This report covers the market sectors of computer equipment (also including peripherals), end-user telecommunications and data communications equipment, office furniture, photocopiers and other office furniture -- comprising mailroom machinery, visual presentation products, binders and laminators, shredders, dictation machines, calculators and typewriters.

MARKET SIZE

The combined market value of these sectors reached £20.83bn in 1997, and grew by 7.8 percent in current value terms during the year.
A percentage analysis of the market is shown in the following table.

MARKET SECTORS

Computer Equipment

The computer equipment sector is by far the largest, growing from £10.24bn in 1993 to £14.11bn in 1997 at end-user prices, despite the fact that prices fell dramatically during this time. Adjusting for the fall in the producer price indices (PPI) shows that the market at manufacturers' prices (excluding maintenance) would have grown by 94.5 percent over 4 years, compared to the 37.8 percent growth which it actually showed.
In end-user price terms, the computer market breaks down into home computers with £2bn, the professional sector with £11.06bn and associated support and maintenance (from the manufacturers) with £1.05bn.
All computer subsectors have shown growth except for that of mainframes and enterprise servers, which continues to fall.

Telecommunications and Data Communications

The telecommunications sector includes terminal equipment, such as fixed and mobile phones, answering machines and fax machines, plus private exchange systems. This reached a value of £2.38bn in 1997. Data communications, including network hardware and modems, contributed a further £1.75bn, bringing the telecommunications/data communications hardware sector to £4.13bn at end-user prices. There is a high level of innovation in these sectors. There is strong growth in data communications and strong growth in the mobile phone market, although this started to slow in 1997.

Office Furniture

Office furniture was worth £1.25bn in 1997. Organisations appear to be catching up on postponed refurbishments and demand for systems furniture and seating is increasing. Health and safety legislation has helped this market. The UK manufacturers lagged behind their European rivals for some time in matters of styling, but are now producing excellent modern designs and attracting custom at home and abroad.

Photocopiers

Around 212,000 photocopiers were sold in 1997 and the end-user value of this market is estimated at £658m. The market is showing overall growth in volume and value, and this growth is coming from the personal copier sector, high-volume copiers and colour copiers. The growing small office/home office (SoHo) sector is buying low-cost personal copiers. High-volume copiers have come down in price and organisations are now upgrading to these higher capacity machines. Digital colour copiers, too, have come down in price. Although they are still expensive, they are beginning to be attractive to corporate users. Prices will continue to fall gradually and strong market growth is forecast for this sector. There is also growth in monochrome copiers using digital technology, which allows the image data to be processed and transmitted to other pieces of equipment. More than half of all copier placements in 1997 were either outright purchases or rental agreements, the latter usually with the manufacturers, and the rest were leased. This is reverse of the situation 2 or 3 years previously, when leasing finance was used for more than half of machines placed. Mistrust of lease contracts is largely to blame, although much has been done to alleviate the the serious problems which existed in dealer contracts in 1993 and to educate the customers to demand fair contracts.

Other Office Equipment

The remainder of the office equipment sectors covered by this report contributed £679m to the total market in 1997. £328m of this came from the very dynamic sector of visual presentation products, which is showing growth in value of over 15 percent per year. The main reason for this boom is the development of various high-tech display options, such as electronic whiteboards, plasma display panels and digital projectors. There is also growth in the the more traditional presentation products. Strong growth in presentation products will continue, possibly to reach a market value of £608m by 2002 in constant 1997 price terms, although prices of the latest high-tech devices are likely to fall once the volume of demand starts to build up. Mailroom equipment includes franking machines, machines to handle incoming and outgoing mail and forms handling machines. New standards by Royal Mail, which has to approve all models of franking machine used in the UK, mean that many owners will need to upgrade their machines to remote resetting models over the next 5 years (to the year 2002). Around 28.6 percent of business mail is franked, which suggests there is considerable scope for increasing the installed base of franking machines. The installed base is increasing gradually in line with growth in mail volumes of around 2 percent. Other growth office equipment sectors are shredders and laminating machines, especially smaller models for the SoHo sector. Other sectors are mature and sales of typewriters/word processors are falling. In the dictation machines sector, most machines sold use analogue technology but digital technology is available and will gradually be taken up.

FUTURE PROSPECTS

Future market prospects vary from sector to sector. There will continue to be strong demand for computing power, but this is being delivered at an ever improving performance/price ratio and the current market value could fall in the next few years despite healthy volume growth. Some growth is forecast for all the five main office equipment sectors in constant end-user price terms. There is strong demand for office space and the output of new commercial buildings is increasing. Key Note predicts that the office equipment market will reach £29bn by 2002 in terms of constant 1997 end-user prices. In current price terms, falling prices may mean the total market falls back to, or below, its 1997 level by 2002. Multifunction products, combining the functions of fax, copier, printer and scanner, have been arriving on the market since 1994/1995, and seem best suited to smaller businesses and the SoHo sector. It has been forecast that these will account for 22 percent of the aggregated market for fax, copiers and scanners by the year 2000 in the the US market, and the situation in the UK is likely to be similar.

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TABLE OF CONTENTS

Executive Summary

Market Overview

DEFINITION

INTRODUCTION

INDUSTRY STRUCTURE

PEST ANALYSIS

THE TOTAL MARKET

MARKET SEGMENTATION

KEY TRENDS AND PROSPECTS

EUROPEAN PERSPECTIVE

Table 1.1: Trends in Employment in Four Key Non-Manual Occupation Groups (000), 1993-1997

Table 1.2: Orders and Output for New Commercial Building Output at Constant 1990 Prices (£m), 1990-1997

Table 1.3: Growth of the UK Market for Office Equipment at Current End-User Prices (£bn), 1993-1997

Table 1.4: The UK Market for Office Equipment by Main Sector at Current End-User Prices (£bn), 1993-1997

Table 1.5: Estimated UK Share of the European Union Office Equipment Market by Sector ( percent), 1997

Competitor Analysis

DEFINITION

PROFILES OF THE LEADING COMPANIES

Computer Equipment

DEFINITION

PRODUCT SECTORS

KEY TRENDS

MARKET SIZE

MARKET SECTORS

MARKET STRUCTURE

EMPLOYMENT

DISTRIBUTION

TRADE ASSOCIATIONS

MAJOR PLAYERS

MANUFACTURERS' PROFILES

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS FROM 1998 TO 2002

Table 3.1: The UK Market for Computer Equipment at Current End-User Prices (£bn), 1993-1997

Table 3.2: The UK Computer Equipment Market at Current Manufacturers' Prices (£bn), 1993-1997

Table 3.3: The UK Market for Computer Equipment at Constant 1990 Prices (£m at msp), 1993-1997

Table 3.4: Apparent UK Market for Computers and Peripherals Equipment (£bn), 1993-1997

Table 3.5: The UK Computer Equipment Market by Product Sector at Current Prices (£m at msp), 1993-1997

Table 3.6: UK Sales of PCs by Volume (million units), 1993-1997

Table 3.7: The UK Printer Market by Main Printing Technology by Volume ( percent), 1997

Table 3.8: Number of VAT-Based Enterprises Engaged in the Manufacture of Computers and Other Information Processing Equipment ( percent), 1996

Table 3.9: Leading Computer Hardware Companies in the UK by Turnover (£m), 1995/1996

Table 3.10: Main Media Advertising Expenditure by Computer Equipment Manufacturers (£m), 1993-1997

Table 3.11: Total Media Advertising Expenditure by Computer Dealers and Services (£m), 1993-1997

Table 3.12: Main Media Advertising Expenditure on Computer Equipment by Sector (£m), 1993-1997

Table 3.14: Main Media Advertisers in the Laptop and Notebook Sector (£000), 1997

Table 3.13: Main Media Advertisers in the Desktop Microcomputer Sector (£000), 1997

Table 3.14: Main Media Advertisers in the Minicomputer and Mid-Range Systems and Servers Sector (£000), 1997

Table 3.15: Main Media Advertisers of Computer Ranges (£m), 1997

Table 3.16: Main Media Advertisers of Computer Printers (£000), 1997

Table 3.17: Main Media Advertisers of Computer Peripherals (£m), 1997

Table 3.18: Total IT Spending Forecast by User Sector (£m), 1997

Table 3.19: Forecasts for the Value of the UK Computer Equipment Market at Constant 1990 Prices (£bn), 1998-2002

Table 3.20: Forecasts for the Value of the UK Computer Equipment Market at Current End-User Prices (£bn), 1998-2002

Telecommunications and Data Communications

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET SECTORS

MARKET STRUCTURE

DISTRIBUTION

TRADE ASSOCIATIONS

MAJOR PLAYERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS FROM 1998 TO 2002

Table 4.1: Estimated Market for Private Telecommunication and Datacommunications Equipment at Current End-User Prices (£bn), 1993-1997

Table 4.2: The UK Market for Telecommunications Equipment at Current End-User Prices (£m), 1993-1997

Table 4.3: Installed Base of Fixed Main Telephone Lines (000), Year Ending March 1994-1997

Table 4.4: Number of Cellular Telephone and Paging Subscribers (000), Year Ending September 1993-1997

Table 4.5: Imports and Exports of Telephone Answering Machines by Value (£m), 1993-1997

Table 4.6: Imports and Exports of Telephone Answering Machines by Volume (000 units), 1993-1997

Table 4.7: UK Installed Base of Fax Machines (000 units), 1993-1997

Table 4.8: UK Market for Fax Machines by Volume and Value (number of units and £m at msp), 1993-1997

Table 4.9: Volume Sales of Plain Paper and Thermal Fax Machines (number of units), 1995-1997

Table 4.10: Imports and Exports of Fax Machines by Value (£m), 1993-1997

Table 4.11: Imports and Exports of Fax Machines by Volume (number of units), 1993-1997

Table 4.12: Main Media Advertising Expenditure of Telecommunications Services and Equipment (£000), 1996 and 1997

Table 4.13: Main Media Advertisers in the Mobile Phone Equipment Sector (£000), 1997

Table 4.14: Main Media Advertisers in Telephone Terminal Sector (£000), 1997

Table 4.15: Main Media Advertisers in the Fax Machine Sector (£000), 1997

Table 4.16: Main Media Advertisers in the Paging Systems Sector (£000), 1997

Table 4.17: Main Media Advertisers in the Modems Sector (£000), 1997

Table 4.18: Patterns of Ownership of Car/Mobile Phones and Pagers ( percent of adults), 1994-1997

Table 4.19: Patterns of Majority Calls Made by Car/Mobile Phones and Pagers ( percent of adults), 1997

Table 4.20: Forecast for the UK Telecommunications Equipment and Data Communications Equipment Market at Constant 1997 End-User Prices (£bn) 1998-2002

Office Furniture

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET SECTOR

MARKET STRUCTURE

EMPLOYMENT

DISTRIBUTION

TRADE ASSOCIATIONS

MAJOR PLAYERS

ADVERTISING AND PROMOTION

FORECASTS FROM 1998 TO 2002

Table 5.1: The UK Market for Office Furniture at Current End-User Prices (£bn), 1993-1997

Table 5.2: Apparent UK Market for Office Furniture at Manufacturers' Prices in Current and in Constant 1990 Prices (£m), 1990-1997

Table 5.3: Apparent UK Market for Office Furniture at Current Manufacturers' Prices (£m), 1993-1997

Table 5.4: The Apparent UK Market for Office Furniture by Sector (£m at msp), 1993-1997

Table 5.5: UK Import and Export Statistics for Office Furniture (£m), 1993-1997

Table 5.6: UK Imports of Office Furniture (£m), 1993-1997

Table 5.7: UK Exports of Office Furniture (£m), 1993-1997

Table 5.8: Size Analysis of Manufacturers of Office and Shop Furniture by Turnover (number of companies and percent), 1995 and 1996

Table 5.9: Leading Manufacturers of Office Furniture Ranked by Turnover for this Activity (£m), 1996/1997

Table 5.10: UK Market Shares of Manufacturers of Office Furniture by Value ( percent), 1996

Table 5.11: Main Media Advertising Expenditure on Office Furniture (£000), 1994-1997

Table 5.12: Forecasts for the UK Office Furniture Market at Constant 1997 Prices (£m at msp), 1998-2001

Table 5.13: Forecasts for the UK Office Furniture Market at Constant 1997 End-User Prices (£m), 1998-2001

Photocopiers

DEFINITION

MARKET TRENDS

MARKET SIZE

MARKET STRUCTURE

DISTRIBUTION

TRADE ASSOCIATIONS

MAJOR PLAYERS

DISTRIBUTION GROUPS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS FROM 1998 TO 2002

Table 6.1: The UK Photocopier Market by Volume (000 units), 1993-1997

Table 6.2: The UK Photocopier Market at Current End-User Prices (£m), 1993-1997

Table 6.3: Volume Placements of Copiers by Segment ( percent), 1995-1997

Table 6.4: Foreign Trade in Photocopiers and Photocopier Parts (£m), 1991-1997

Table 6.5: Distribution of Photocopiers by Method of Acquisition ( percent of number of units acquired), 1994-1997

Table 6.6: Main Media Advertsing Expenditure on Photocopiers (£000), 1997

Table 6.7: Forecast for the UK Photocopier Market at Constant 1997 End-User Prices (£m), 1998-2002

Other Office Equipment

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET SECTORS

MARKET STRUCTURE

DISTRIBUTION

TRADE ASSOCIATIONS

MAJOR PLAYERS

BUYING BEHAVIOUR

FORECASTS FROM 1997 TO 2002

Table 7.1: Estimated Market for Other Office Equipment at Current and Constant End-User Prices (£m), 1993-1997

Table 7.2: Estimated Market for Other Office Equipment at Current End-User Prices (£m), 1993-1997

Table 7.3: Foreign Trade in Typewriters and Word Processors (£m), 1996 and 1997

Table 7.4: Suppliers' Shares of the UK Installed Base of Franking Machines ( percent), Year Ending December 1997

Table 7.5: Forecasts for Other Office Equipment at Constant 1997 End-User Prices (£m), 1997-2001

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

The Future

FORECASTS FROM 1998 TO 2002

Table 9.1: Forecasts for New Commercial Building Output at Constant 1990 Prices (£bn), 1996-1999

Table 9.2: Forecasts for the UK Office Equipment Market at Constant 1997 End-User Prices (£bn), 1998-2002

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1998 Key Note

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Last updated by Jacob van Eldik 22th February 2000