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This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
Moderate growth as technology access broadens. The Top 5 electronics distributors registered modest growth in 2016, with the top company in this sector, Avnet, down 6.1 percent for the year, while Arrow Electronics and TTI Inc. posted gains of 2.3 percent and 2.1 percent, respectively. More companies have access to technology that a few years ago was limited to only the largest players, according to Avnet CEO Bill Amelio. "You don't have to be in a big company anymore to have tools available to you that only a few years ago were only available to a select few who had the money to have those sophisticated systems," he says. "These systems now are available relatively inexpensively across most digital portals, and that's essentially created an explosion of new products that we hadn't seen before." Look for competition to heat up and demand to grow for these device distributors.
Internet of things continues to dominate sector's mindshare. As Amelio told MDM earlier this year: "What an interesting time in the history of electronics. We're seeing the explosion of internet of things. People been talking about it for years, but it's actually happening now. You're seeing devices that are unique, that can change people's lives, popping up all over the place. We're talking about a $20 billion to $30 billion dollar connective device world in the not too distant future. And we're right in the middle of that." The goal now, Amelio and others have said, is to find ways to monetize the data from these devices. "That's kind of the Holy Grail that everyone's trying to figure it out, and there hasn't been any one player that's actually stitched it all together yet."
Handful of acquisitions and divestments alter companies' focus. Avnet was the most active electronics distributor in 2016 in terms of M&A. The company spun off its Technology Solutions business and acquired Premier Farnell and Hackster, moves that led to the company rebranding in early 2017. Arrow Electronics Inc. made an intriguing move when it acquired the global internet media portfolio focused on technology and electronic design from UBM, including EE Times, EDN, ESM, Embedded, EBN, TechONline and Datasheets.com. The company said the moves will "strengthen its position as a foremost thought leader and trusted adviser in IoT and technology design trends."