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The impact of the coronavirus has hurt the PC industry. But the shift to remote working will trigger pent-up demand, says Canalys.
Like so many industries, the PC sector has suffered damage as a result of the coronavirus pandemic and the financial fallout. Businesses and consumers that may have spent money on computers are delaying purchases of nonessential items. But with the COVID-19 lockdown still in force, organizations have been transitioning to a remote workforce, a trend likely to continue and one that will benefit PC makers, according to research firm Canalys.
In a press released published Tuesday, Canalys said it predicts that global PC and tablet shipments will fall 7% this year, to 367.8 million units, from 395.6 million last year. Seeing the worst of the COVID-19 impact as behind the industry, the research firm is eyeing smaller declines in shipments for the rest of the year versus that of the first quarter.
Image: Canalys
Two factors that will help PC makers for the remainder of 2020 will be a return to a healthier supply chain and the resumption of manufacturing in China. Both of those will serve pent-up demand of PCs for remote workers and educational facilities. Many businesses have found success with remote working and will opt to employ it on a wider scale. Similarly, schools and educational facilities have invested in digital training and might make only a partial return to on-location learning.
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Still, the financial side effects of the coronavirus will cause consumers and organizations to prioritize essential spending ahead of buying new PCs, especially if times get tougher. Notebooks will continue to experience heavy demand, but desktops and tablets will face challenges, according to Canalys.
"From a category perspective, notebooks have been at the center of a demand surge that has left vendors and channel partners scrambling," Ishan Dutt, an analyst at Canalys, said in the press release. "Desktop refresh will suffer to a greater degree as businesses face prolonged uncertainty about the scope of their operations and dedicated office space needs. Tablets, which have the greatest reliance on consumer spending, will face a slump as holiday season demand in Q4 is expected to take a hit this year."
Looking ahead, Canalys believes the global PC market will be flat in 2021 but return to modest growth the following year.
"Canalys expects the global PC market to return to growth of 2% in 2022, with desktop and notebook shipments overcoming prolonged weakness in the tablet space," Canalys Research Director Rushabh Doshi said in the press release. "But it is important to keep things in perspective: A modest recovery from a weak 2020 will not see the PC market return to the highs of 2019 for some years to come."
Drilling down to the major regions, China's PC shipments will drop by only 3% this year but grow to 4% in 2021. Though China's economy was the hardest hit by the coronavirus, it's positioned to be one of the healthiest starting this quarter and beyond. In Asia Pacific, the PC market is expected to fall by only 1% in 2020 and then recover next year.
Latin America will be in a tougher spot with PC shipments forecast to plummet by 16% for the current quarter, followed by declines of 6% and 9% in the third and fourth quarters, respectively. The region isn't expected to see growth until the second quarter of 2021. In the EMEA (Europe, Middle East, Africa) region, PC and tablet shipments are projected to drop by 10% this year before achieving growth of 1% next year.
Finally, in North America, PC and tablet shipments are expected to drop by 6% in 2020 and not fully recover until 2022, when the market is forecast to grow by 4%. Canalys is eyeing a surge in PC demand in the US this quarter as businesses strive to help employees work from home and educational facilities increase purchases of Chromebooks. But with a battered economy and unemployment above 20%, consumer demand for computers in the US is likely to drop off toward the end of the year.
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Source: https://www.techrepublic.com/article/pc-shipments-expected-to-drop-this-year-but-worst-of-2020-may-be-behind/
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