MarketEye: The North American Switch Market Starts 2008 with Sales Dollars Down 30% vs. Q4 and 42% Lower than Q1 of 2008

06.30.2009 // Posted by: Michael Schwert // Posted in: Articles, Switches & Relays

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This month the first quarter performance of the North American and European switch markets are compared. Based on Switch Tracks data the North American market started the New Year down 30% from the previous quarter and 42% lower than Q1 of 2008. Europe had better quarter-over-quarter results, down only 6%, but they were also down 39% compared to the first quarter of last year.

The North American Switch Market Starts 2008 With Sales Dollars Down 30% Versus Q4 And 42% Lower Than Q1 Of 2008

Total reported sales for all switch types in North America for Q1 of 2009 were 37% less than reported in the previous quarter and 42% lower than the first quarter of 2008. Sales units for Q1 2009 came in 18% below Q4 2008 and 46% less than Q1 of last year.

The total booking dollars reported for all switch types in North America for Q1 2009 were 27% less than the previous quarter’s and below Q1 2008’s total by 47%. The first quarter’s book-to-bill ratio for dollars was 0.863. Booking units in Q1 2008 ran nearly 16% below Q4. The first quarter’s book-to-bill ratio for units was 0.949.

The first quarter versus the fourth showed total sales dollar and units down 31% and 18% respectively. Each switch type had percentage dollar losses near the 31% total except for tact switches that lost only 14%. Unit loses were also experienced in all types and ranged from 9% to 49%. Despite four types realizing rising prices, the total ASP dropped 16% driven by snap action and tact switch price declines. Compared to the first quarter of last year dollars and units were again down across all types with greater losses than the Q4 comparison. Unit losses were greater than dollars in five types pushing the ASP higher by almost 8% in total.

Sales Growth By Switch Type

When compared to the last quarter total booking dollars and units dropped 27% and over 15% respectively with losses in seven of eight types for each. The one bright spot was tact switches where booked dollars and units grew 16% and 12% in that order. Despite price gains, with some being small, in seven of eight types the overall ABP fell 14%. This was caused by a mix shift toward tact switches that grew in units as all other types shrank. Booked dollars and units in Q1 against a year ago were down in all eight types with an overall 47% drop in dollars and 46% for units. The quarterly ABP versus the same period of last year had mixed results with half the types rising but down in total by about 2%.

Bookings Growth By Switch Type

The graph below shows total quarterly sales and bookings in dollars and units for the reported data since Q1 CY 2003. Unit sales and bookings were on a significant upward trend that started in the fourth quarter of 2006 and peaked in the beginning of 2008. Sales and booking units and dollars fell significantly in third and fourth quarters of 2008 and more so in the first quarter of this year. All sales and booking metrics are at the lowest levels recorded by Switch Tracks.

All three ratios ended their decent that started in the first half of last year with slight gains in Q1 of this year.

For the period, selling and booking prices peaked at the end of 2006 generally declined through 2007. Selling prices rose during 2008 as booking prices declined. In Q4 of 2008 both price measures spiked but returned to be at or near the level of six years ago.

European Switch Market Starts 2009 With Sales Euros Down 6% And Bookings 11% Less Than Q4 Of 2008

Total reported sales euros for all switch types in Europe for Q1 of 2009 were 6% below the previous quarter and 39% less than the first quarter of 2008. Sales units for Q1 2009 totaled 4% fewer than the Q4 2008 and 40% below Q1 2008.

The total booking euros reported for all switch types in Europe for Q1 2009 came in 11% lower than the previous quarter and below Q1 2008 by more than 38%. The fourth quarter’s book-to-bill ratio for euros was 1.018. Booking units in Q1 2009 ran 5% below Q4. The third quarter’s book-to-bill ratio for units was 1.041.

The first quarter versus the fourth showed declining rates for sales euros and units for all but keylock euros, slide units, and tact units. The average selling prices (ASP) fell for all except keylock, push button, and snap action switches switches. Q1 compared to a year ago shows significant losses in euros and units for all categories. ASPs improved in total and for four of the eight types.

Sales Growth By Switch Type

When compared to the last quarter total booking euros dropped for six of eight types while units fell in seven of eight categories. The average booking price fell in four of eight types and in total. Bookings in Q1 versus a year ago were significantly lower in total euros and units. The total average booking prices compared to the same period a year ago were up only slightly even with improvement in six of eight types.

Bookings Growth By Switch Type

The graph below shows total quarterly sales and bookings in euros and units for the reported data since Q1 CY 2007. Sales and booking euros and units were at a period high in Q1 of 2007. All measures then moved lower through Q3 of 2007. Bookings moved higher in Q4 of 2007 and Q1 of 2007 and have fallen since. Sales measures jumped up in the first quarter of 2008 then moved lower the next four quarters.

Book-to-bill euros and units moved together from Q3 of 2007 until Q2 of 2008 when the unit ratio went lower and the euros ratio rose. In Q4 the unit ratio jumped up near the euro mark and both fell slightly in Q1. The ABP-to-ASP ratio remained steady near 1.0 for three quarters starting in Q3 of 2007 then rose significantly in Q2 of 2008, again in Q3, and has now moved under 1.000.

For the period, booking prices peaked in Q4 of 2008 and fell back in Q1. Selling prices jumped up to a two year high ending four quarters of decline in Q4 of last year and slipped a bit in Q1.

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