Tuesday, 14 April 2020 09:01

Global PC demand up in 1Q, but shipments down due to supply chain issues

Global PC demand up in 1Q, but shipments down due to supply chain issues Pixabay

Global personal computer shipments fell by 8% in the first quarter of 2020 year-on-year, the biggest decline since 2016, despite demand soaring due to the increase in working from home and online education, the tech research firm Canalys says, adding that production and logistical issues due to the coronavirus crisis caused big delays.

A total of 53.7 million desktops, notebooks and workstations were shipped during the quarter, Canalys said, adding that vendor rankings remained stable. Lenovo led the market with 12.8 million units shipped, while HP was second (11.7 million units) and Dell was third (10.5 million units).

Among the top five, Apple was the most affected, with a drop of more than 20% to 3.2 million units. Acer made up the five, with 3.1 million units, a drop of 12.6% compared to the first quarter of 2019.

"The PC industry has been boosted by the global COVID-19 lockdown, with products flying off the shelves throughout Q1," said Rushabh Doshi, research director at Canalys. "But PC makers started 2020 with constrained supply of Intel processors, caused by a botched transition to 10nm nodes.

"This was exacerbated when factories in China were unable to reopen after the new year holidays."

pc 1q2020 canalys

Doshi added that this slowdown in supply met with accelerated demand, "as businesses were suddenly forced to equip a newly remote workforce, placing urgent order for tens of thousands of PCs".

"Children, too, needed their own PCs, as schools closed and lessons went online. The urgency of demand from both the consumer and commercial sectors, combined with the shortage of supply, meant device cost was no longer the key consideration. Instead, speed of supply was the most important factor," he said.

Canalys said PC vendors would report profits in the next few weeks, with the percentages of operating margins at all-time highs.

Canalys analyst Ishan Dutt said: "As we move into Q2, the production constraints in China have eased. But the spike in PC demand seen in Q1 is not likely to be sustained and the rest of the year looks less positive.

canalys 1qpc2020

"Few businesses will be spending on technology for their offices, while many homes will have been freshly equipped. A global recession has begun - businesses will go bankrupt, with millions newly unemployed. Even governments and large corporations will have to prioritise spending elsewhere.

"Many parts of the tech industry have benefitted from the early part of this extraordinary lockdown period, but we expect to see a significant downturn in demand in Q2 2020."

Dutt said with factories now reopened and virtually up to full speed in China, PC vendors would find it difficult to manage supply chain and production correctly over the next three to six months.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.





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