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ID: 217752


Date: 2021-10-12

PC sales: Demand outstrips supply and backlogs persist, analysts warn

The PC market is still growing like it was in the year 2020, but supply is a bigger problem than demand in 2021. Amid a pandemic-driven boom in PC sales across the world, tech companies are in the strange position of being unable to meet demand due to chip and component shortages.  Tech analyst firms have reported muted shipments in the third quarter of 2021, due primarily to problems with the semiconductor supply chain, which has also caused problems for car manufacturers and the broader tech industry.    The best laptops: Our recommended models for every use case and platform New year, new laptop? These are the devices that should be at or near the top of your shortlist. Read More According to researcher IDC, supply chain issues are affecting shipments of PCs, which grew just 3.9% year-on-year in Q3 2021.  Hunker down: The chip shortage and higher prices are set to linger for a whileWhile that's still growth in a category that was in decline for much of the 2010s due to booming smartphone sales, the growth was muted due to chip and other component shortages caused by the pandemic. It's one reason gamers have struggled to buy the Sony PlayStation 5.    "The PC industry continues to be hampered by supply and logistical challenges and unfortunately these issues have not seen much improvement in recent months," said Jitesh Ubrani, a research manager for IDC's mobile and consumer device tracker.  "Given the current circumstances, we are seeing some vendors reprioritize shipments amongst various markets, allowing emerging markets to maintain growth momentum while some mature markets begin to slow." IDC's view includes desktops, notebooks, and workstations.  Analyst firm Canalys has a different picture, stating that the PC market grew 5% year-on-year in Q3 2021, but also cites supply chain and logistics issues as the cause for the slowdown.  Canalys says shipments of desktops and notebooks, including workstations, reached 84.1 million units in the quarter. IDC puts the figure at 86.7 million. It includes Chromebooks but not tablets. Both analysts agree that demand for PCs remains high, but big brands can't keep up with orders as companies navigate hybrid and remote work arrangements.  "Despite high demand, PC business suffered a series of blows, making it extremely hard to facilitate supply," Canalys notes. Vendors and channel partners are still having difficulty fulfilling orders as backlogs persist, it said. "Notebooks and mobile workstation shipments grew 3% year-on-year to hit 67.4 million units, while shipments of desktops and desktop workstations rose 12% to 16.6 million units," it noted.  It's not going to be easyThe top computer brands by shipments include Lenovo, HP, Dell, Apple, Asus, and Acer, according to IDC. Notably, Dell shipments grew 26.6% over the period, while HP's declined by 5.8%.  Canalys also puts Lenovo in the lead, followed by HP, Dell, Apple, and Acer. It says Dell grew 26.7% over the period, while HP shrank 5.8%.  Many large tech companies have seen earnings rise from strong demand as economies re-open, but some have fared better due to supply chain arrangements with chip suppliers. As reported by Bloomberg last week, Dell has claimed its supply chain folks have been better than rivals at securing components.  Part of the industry's supply chain problem is that no one seems to know the true extent of the chip shortage due to private, long-term contracts between chip makers and their customers.    " With the supply situation throwing curve-balls one after the other, PC vendors have it harder than anyone, as they manage this intricate and complex problem of supply and demand, where no magic formula exists," said Rushabh Doshi, research director at Canalys.  "What's worse is that they need to address not two, or twenty, but more than a hundred markets around the world. Being a PC vendor is both enviable and unenviable at the same time."