The soaring demand for personal computers in the past year that triggered the worst chip shortage in years seems to be waning as schools and offices reopen.
Fewer consumers are likely to buy laptops and tablets this year than they did last year when people rushed to purchase computers as schools went online and people worked remotely because of the pandemic, industry executives said, even as they predicted demand from enterprises to stay healthy for a while.
Global sales of personal computers registered the fastest growth in a decade last year, catching chip makers off guard. The resulting chip shortage has pushed up consumer electronics prices and forced industries, including automobiles, to slash production.
“The mad rush we saw in 2020 for laptops to support remote work and learning is no longer there. But there is pending demand from large contracts that were delayed due to chip shortages. Vendors will try to fulfil them by the year-end,” said Jaipal Singh, research manager, client devices, IDC India.
Companies account for 45-50% of all PC purchases, with individual consumers making up the rest. But the number varies from quarter to quarter. If a large order comes, the enterprise figure can sometimes go as high as 70%, according to data by research firm International Data Corporation (IDC). India shipped 7.9 million PC units in 2020, IDC figures showed.
In India, demand for notebooks and tablets soared after the nationwide lockdown, leading to 4.1 million unit shipments in the June quarter of 2021, the highest in five years, according to data by market researcher Canalys.
Meanwhile, global September quarter PC shipments fell by 2% due to a slump in demand in markets such as the US and Japan, Canalys said. But the Indian market may not see this pattern play out.
“Demand has not yet slowed in India. We can anticipate the growth streak to continue in the Asia-Pacific, as the pandemic’s demand is met and PC vendors prioritize these specific markets. We have seen the Indian market grow 33% in PC shipments (excluding tablets) and 19% in tablet shipments in Q3 2021,” said Himani Mukka, research analyst, Canalys.
According to Mukka, backlog orders and offices opening will contribute to growth in the business segment. But the story may pan out differently in the consumer segment. “The lockdown caused the specific demand we saw during the pandemic. So, you may not see the same sort of growth, but you still see the same level of volumes, even if the year-on-year growth may not be so big,” said Ranjit Atwal, research director, Gartner.
Atwal believes consumer demand will slow down faster than business. “As people go back to work and children go back to school, people won’t be buying PCs. However, businesses didn’t really buy a lot last year, but as they go back to offices, there will be more demand in offices,” he added.
Gartner earlier predicted a slowdown in demand for PCs in the second half of 2021 due to an increase in prices and subsequent supply constraints of parts that had extended lead time for some enterprise mobile PC models to as long as 120 days.
With people returning to offices, IDC’s Singh said there will be some pause in buying. “However, channel inventory in enterprises is low right now due to semiconductor shortages. Even if demand growth is slow, vendors will try to keep a healthy channel inventory, so shipments may not decline drastically,” Singh added.
