Even though demand for PCs increased, their shipments fell over 8 per cent on Year-over-Year (YoY) basis in the first quarter of 2020, Canalys has said. Stating it as the largest decline since Q1 2016, the market research firm said that the shipments declined because of the severe delays in production and logistical issues owing to the health crisis caused by Coronavirus.
In the Q1, vendors shipped 53.7 million desktops, notebooks, and workstations. Lenovo shipped the maximum 12.8 million units, followed by HP Inc's 11.7 million units and Dell's 10.5 million units. Apple’s share declined the most, as the iPhone-maker’s shipments fell over 20 per cent to 3.2 million units. This was exacerbated by factory shutdown in China for a larger part in Q1.
‘The PC industry has been boosted by the global COVID-19 lockdown, with products flying off the shelves throughout Q1. But the PC market started 2020 with a constrained supply of Intel processors, caused by a botched transition to 10nm nodes,’ said Rushabh Joshi, Research Director at Canalys.
He said that the Coronavirus outbreak has forced people to work from home, causing an increase in demand, however, the pandemic has also forced the closedown of manufacturing units in China, leading to a decrease in shipments. ‘The slowdown in supply met with accelerated demand, as businesses were suddenly forced to equip a newly remote workforce, placing urgent orders for tens of thousands of PCS,’ Doshi added.
The firm also said that demand for peripherals like headphones, webcams, printers, and monitors also increased during the quarter. Home-working software also exceeded expectations, including office, collaboration, virtual desktop, remote access, and security. AMD was the beneficiary, as businesses, as well as consumers, saw it as the best competitive alternative to Intel.
Although the PC shipments declined in the first quarter of 2020, the PC vendors will report healthy profits over the next few weeks, with operating margin percentage reaching all-time highs, Canalys said. According to Ishan Dutt, an analyst at Canalys, this will be due to the ease in the production constraints in China. However, he says that the spike in PC demand seen in Q1 is not likely to be sustained and ‘the rest of the year looks less positive’.
‘Few businesses will be spending on technology for their offices, many homes will have been freshly equipped. A global recession has begun – businesses will go bankrupt with millions of newly unemployed. Even governments and large corporations will have to prioritise spending elsewhere. Many parts of the tech industry have benefited from the early part of this extraordinary lockdown period, but we expect to see a significant 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.