Coronavirus to cause PC shipments to fall in 2020

Coronavirus to cause PC shipments to fall in 2020

2020 expected to be challenging while the long-term outlook is “slightly positive”

Credit: Dreamstime

The PC market, including desktops, notebooks, workstations and tablets, is expected to take a hit by the end of 2020 with shipments forecast to decline by nine per cent year-on-year, partly due to the spread of coronavirus.

Aside from the coronavirus, the other significant factor involves the transition of Windows 7 to Windows 10 as this creates “tougher year-over-year growth comparisons," according to the International Data Corporation’s (IDC) Worldwide Quarterly Personal Computing Device Tracker.

Credit: IDC

These two factors are expected to see shipments in 1Q20 experience a year-on-year decline of 8.2 per cent and 12.7 per cent in 2Q20. This greater drop in 2Q is predicted because existing first quarter inventories are expected to be depleted by the second quarter, IDC research claims.

Growth rates are expected to improve in the second half of the year but the market will still remain in decline. 

Credit: IDC

Linn Huang, research vice president of devices and displays, said current conditions have already impacted the global supply chain, and its recovery, expected to be during the middle of the year, is anticipated to be slow.

"We have already forgone nearly a month of production given the two-week extension to the Lunar New Year break and we expect the road to recovery for China's supply chain to be long with a slow trickle of labour back to factories in impacted provinces until May when the weather improves," Huang said.

"Many critical components such as panels, touch sensors, and printed circuit boards come out of these impacted regions, which will cause a supply crunch heading into Q2."

Jitesh Ubrani, research manager for IDC’s Worldwide Mobile Device Trackers said “there’s no doubt” that 2020 will be a challenging year with manufacturing levels at all-time lows and ready to ship products are being held back by logistics issues.

"Lost wages associated with factory shutdowns and the overall reduction in quality of life will further the decline in the second half of the year as demand will be negatively impacted," Ubrani said.

If 2020 sees a reduction in the spread of coronavirus, IDC’s research expects minor growth in the PC market to return in 2021, sourced mostly from thin and light notebooks, detachable tablets and convertible laptops. In addition, gaming and cellular enabled PCs and tablets are also expected to help in this scenario to a lesser extent.

Looking longer-term, the five year forecast is “slightly positive”, with shipments anticipated to grow to 377.2 million in 2024 with a five-year compound annual growth rate (CAGR) of 0.2 per cent.

Compared to IDC's forecast of an over 20 per cent drop across the first half of the year, previously reported research from analysis firm Canalys claims that there could be a 20 per cent shipment decline in just the first quarter of 2020.

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