Dell on top as PCs drive major OEM rebound

Dell on top as PCs drive major OEM rebound

Vendor's PC revenues rose by 22 per cent, to US$13.3 billion, for the most recent quarter when compared to 2019.

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Dell is leading the pack among the global original equipment manufacturers (OEM) during the first calendar quarter of 2021 as its PC business surges amid the coronavirus pandemic. 

According to analyst firm Technology Business ResearchDell Technologies, Lenovo and HPs' PC business all saw strong demand last year, marking significant leaps throughout the first quarter. 

TBR engagement manager and senior analyst Angela Lambert said OEM PC revenue rose “significantly” when compared to Q1 of 2019, with Dell up by 22 per cent to US$13.3 billion, Lenovo rising by 39.3 per cent to US$12.4 billion and HP increasing by 19.1 per cent to US$10.6 billion. 

Credit: Technology Business Research

While the pandemic is driving demand for PCs, Lambert also said silicon supply shortages have resulted in chip manufacturers producer higher-end components and OEMs have become less competitive on pricing. 

The burgeoning PC market comes as Dell gained overall revenue of US$24.5 billion for the first quarter, surpassing the same quarter in both 2020 and 2019. 

A similar trend was picked up by Lenovo and HP, which made out with US$15.6 billion and US$15.9 billion this quarter, respectively. Hewlett Packard Enterprise meanwhile struggled somewhat, making US$6.7 billion revenue for this quarter, which is up from Q1 2020’s US$6 billion, but down from Q1 2019’s US$7.2 billion. 

According to Lambert, the decline coincides with the fact that it currently does not have any skin in the PC market. 

“The fact that HPE was the only vendor of the four to not grow revenue in 1Q21 compared to 1Q19 and is also the only vendor in the compare lacking a PC business suggests growth is not consistent across hardware segments," she claimed. 

Compared to the PC market, data centre revenue isn’t performing as strongly, with both Dell and HPE reporting revenues below Q1 2019 levels, reaching US$7.9 billion and US$5.6 billion respectively, for the first quarter this year. 

“This suggests that year-to-year revenue gains represent customers showing less pandemic-related spending hesitancy and resuming delayed data centre projects, while declines compared to 1Q19 align to the overall trend of enterprise data centre consolidation in favour of public cloud,” Lambert noted. 

Meanwhile, Lenovo’s data centre segment in Q1 2021 managed to beat the same quarter from 2019, reaching US$1.6 billion this year. Lambert hypothesised this could be due to its cloud service provider customer segment, claiming it has a higher demand for data centre infrastructure compared to the enterprise segment. 

Lambert also predicted the overall trend of revenue growth will continue for hardware vendors as they regain confidence in increasing their IT spend again. 

“Profitability will likely also remain strong as supply constraints on chips will lead to price premiums and a focus on selling high-end devices,” she said.  

“The data centre space will likely continue to benefit from pent-up demand, but will be offset to some degree by the ongoing trend of public cloud and SaaS [software-as-a-service] adoption, leaving PCs to drive the largest OEM revenue increases in 2021.” 

Tags HPDellTechnology Business ResearchTBRHewlett Packard EnterpriseDell Technologies


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