A RECENT report released by the Bank of England stated that for the first time on record British shoppers decided to reduce household debt during the month of December.
It is possible that the numbers indicate a shift in consumer spending and a desire to get personal finances in shape for the year ahead. The Christmas trading period has been a difficult time for a number of high street retailers including Game Group, Dixons, and HMV which all reported disappointing trading updates.
Even food retailing giant Tesco issued below average Christmas numbers and stated that the core UK business has struggled in the current competitive environment. However, despite the consistent headwinds, customers seem to have an appetite for technology.
In China, US conglomerate Apple made the headlines following an incident at its flagship store in Beijing. Customers queued overnight to get their hands on the group's new iPhone, the 4s. Unfortunately the store failed to open on schedule and angry shoppers pelted the building with eggs and shouted at employees. China is not the only nation which has a following for the latest cutting-edge products and Apple has created a strong brand and established a growing market presence.
To further develop the business Apple has recently announced the appointment of Dixon's chief executive, John Browett, as its new head of retail. It is likely that Mr Browett will expand on the success Apple has enjoyed since opening its first UK store in 2004.
However, Mr Browett is not the only successful UK export to Apple. FTSE 100 business Arm recently reported an upbeat set of numbers, which were underpinned by the strong growth of the smartphone and table computer markets. Arm is a leading designer of the microchips which are used in the iPhone and also the iPad, together with a number of other devices such as the Samsung Galaxy. The group is not involved in the manufacture of the microchips but receives a payment for the use of the design. Arm appears well-placed for the future given the strong demand for technology products and looking forward the business may also benefit from the advent of the smart TV and the evolution of household devices.
Looking across the Atlantic, the main news in the technology sector is the announcement that Facebook is set to float. The popular social networking company is a well-known story and many people in the UK use the service. There is a lot of excitement around the float and a value of $100bn may be placed on the business.
It is likely that adverts promoting the launch will be posted on the site in the coming months. Facebook is expected to list in the spring.
Although customers are more mindful about how they spend their money, desirable products such as the iPhone and the iPad are in demand. Indeed, Apple reported record-breaking numbers in January with the sale of 37m iPhones and 15.4m iPads over the quarter. Facebook also appears to be positioned well with a leading edge in social media due to its 845m active users.
Anthony Peart Anthony.Peart@Brewin.co.uk
