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Analysts agree the global PC shipment decline is set to worsen

Asia Pacific records Gartner’s sharpest ever PC shipment decline

PC shipments around the globe have been rocked by the coronavirus pandemic and, despite a surge in demand, experts are saying the worst is yet to come.

This is according to research firms Canalys, IDC and Gartner, which have all recorded global PC shipment declines for the March quarter at eight per cent, 9.8 per cent and 12.3 per cent, respectively.

At a regional level, Gartner claims the Asia Pacific market, excluding Japan, saw year-over-year decline at 27.1 per cent for the three-month period, the sharpest drop since it started tracking the PC market over 20 years ago.

Both Gartner and IDC state the regional decline was driven largely by China, as it saw business, consumer and government activities grind to a halt during the quarter.

Rushabh Doshi, research director at Canalys, said the surge in demand was seen due to both businesses and school-aged children – two groups that have needed to transition into the virtual space to remote working and education – acquiring hardware.

Doshi added that the Q1 situation was exacerbated by the initial PC market environment with Intel processor supply being constrained by a “botched” transition to 10 nanometer (nm) nodes, followed by factories in China being unable to open after the Lunar New Year.

“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,” Doshi said.

IDC's analysis claimed that even though there was a short-term boost in demand, longer-term demand is likely to be negatively affected in the region for months or potentially even quarters.

“This bump in demand may be short lived as many fear the worst is yet to come and this could lead to both consumers and businesses tightening spending in the coming months," said Jitesh Ubrani, research manager at IDC’s Mobile Device Trackers.

Canalys echoed this sentiment, with its analyst Ishan Dutt claiming the outlook for the rest of the year is “less positive,” going so far to say that a global recession has begun.

“Businesses will go bankrupt, with millions newly unemployed. Even governments and large corporations will have to prioritise spending elsewhere,” Dutt said. “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 supply chain and production correctly over the next three to six months.”

For the most part, PC vendors were able to keep up with the demand in the short-term, with Canalys even claiming that these businesses will report “healthy” profits over the next few weeks. IDC's Ubrani added that the demand was able to be met due to stockpiling supply at the end of 2019 caused by the threat of increased tariffs.

Mikako Kitagawa, research director at Gartner, said the quarter’s vendor results underline the economic uncertainties that are affecting PC spending, especially with small and medium businesses.

“This uncertainty, coupled with the end of the Windows 10 upgrade peak, is causing enterprises to shift their IT budgets away from PCs and toward strategic business continuity planning,” Kitagawa said. “We will start seeing enterprises and consumers alike extending their PC life cycles on a more permanent basis as they focus on preserving cash.”

The three research firms were unanimous in their vendor rankings, with Lenovo seeing the highest market global PC shipment market share at approximately 24 per cent. This was then followed by HP and Dell, which recorded approximate market shares of 22 per cent and 20 per cent, respectively.