PC shipments drop to a minimum of four years
Chennai: Demand for personal computers soared during the January-March period due to remote work and learning requirements of blocking measures worldwide.
But the crisis also caused severe production delays and logistical problems that drove global shipping to drop 8%, the strongest since the first quarter of 2016. In the first quarter, vendors shipped 53.7 million desktops, laptops and workstations.
The PC industry has been fueled by the global crash of Covid-19, with products hitting the shelves in the first quarter, said Rushabh Doshi, director of research for Canalys. But PC makers started 2020 with a limited supply of Intel processors, caused by a failed transition to 10nm nodes. This was exacerbated when factories in China were unable to reopen after the Lunar New Year holiday. The slowdown in supply was met with accelerated demand, as companies were suddenly forced to equip a remote workforce recently, placing urgent orders for tens of thousands of PCs. Children also needed their own computers, as schools closed and lessons were put online. The urgency of demand from the commercial and consumer sectors, combined with a shortage of supply, meant that the cost of the device was no longer the key consideration. Instead, the speed of supply was the most important factor. During the quarter, top technologists, including Infosys, TCS, Wipro and Cognizant, moved nearly 3 million of their employees to their homes to work from home, as companies implemented social distancing amid the closure announced in India during the last week of March. The top vendor ranking was stable, with Lenovo still leading the PC market with 12.8 million shipped units. HP ranked second with 11.7 million units, followed by Dell with 10.5 million units. Of the top five, Apple was the hardest hit in the first quarter, as its shipments fell more than 20% to 3.2 million units, according to the Canalys report. PC vendors will report healthy gains in the coming weeks, with operating margin percentages hitting all-time highs. Many other home technologies have had similar popularity, including headsets, webcams, printers, and monitors. Home work software also exceeded expectations, including office, collaboration, virtual desktop, remote access, and security. AMD, in particular, is doing well, increasingly accepted as a competitive alternative to Intel by businesses and consumers, according to the report. With the easing of production restrictions in China, few companies will spend on technology for their offices, while many homes will have been recently equipped. With factories now reopened and at virtually full speed in China, PC vendors will face a challenge to manage supply chain and production properly for the next three to six months, Ishan Dutt, an analyst at Canalys wrote in that note.