PC demand surges but shipments fall 8% due to a supply chain hit by COVID-19

Strict lockdown measures around the world have caused severe delays and logistical issues leading to worldwide PC shipments falling by eight per cent, technology market analyst firm Canalys said.

However, the demand for PCs has witnessed a surge in Q1 2020.

Lenovo has emerged as the market leader with 12.8 million units shipped, followed by HP with 11.7 million units and Dell with 10.5 million units. Of the top five, Apple was hit hardest in Q1, as its shipments fell by over 20 per cent to 3.2 million units.

In the first quarter, vendors shipped 53.7 million desktops, notebooks and workstations, according to the latest Canalys research.

PC demand surges but shipments fall 8% due to a supply chain hit by COVID-19: Canalys“The PC industry has been boosted by the global COVID-19 lockdown, with products flying off the shelves throughout Q1,” said Research Director at Canalys, Rushabh Doshi.

Doshi, however, said that PC makers had a rough start at the beginning of 2020 with a constrained supply of Intel processors, caused by a ‘botched’ transition to 10 nm nodes. He added that the woes of PC makers worsened when Chinese factories were unable to reopen after the Lunar New Year holidays.

Doshi further added that the slowdown suddenly met with an accelerated demand as businesses across the world were forced to adopt a remote workforce. On the other hand, closure of schools too fuelled the demand for PCs as teaching 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, the speed of supply was the most important factor,” Doshi explained.

The research firm said PC vendors will ‘report healthy profits’ over the coming weeks, with operating margin percentages reaching all-time highs.

Canalys said home-working software also exceeded demands and added that AMD, in particular, is being considered as the competitive alternative to Intel by consumers and businesses, alike.

Analyst at Canalys, Ishan Dutt, feels that the production constraints in China have eased but the spike in PC demands as seen in Q1 may not be sustained and the rest of the year seem bleak.and expects a ‘downturn in demand’ in Q2 2020.

“With factories now reopened and virtually up to full speed in China, PC vendors will face a challenge to manage the supply chain and production correctly over the next three to six months,” Dutt added.