The ITC industry has been a boon at a time when lock-downs and social distancing have virtually put an end to physical meeting people in business or in the pub. It’s more boring of course, but just imagine how difficult it would have been in 2018 when we only had fixed-line phones and the post office to help us keep in touch. One area of the industry that had reached maturity with little growth potential was the PC market before the pandemic. The new growth in Q2 2020 sales (see my Figure above) is partially due to the mass movement of business staff to homeworking. In this post I’m going to look at the opportunities and challenges facing this market in coming years, while sharing my latest stats with you. Please get in touch if you need more detail.
The steep fall in shipments and spending in Q1 was partially due to the disruption in component manufacturing and assembly in China and other East Asian countries where all PCs are built today, while the big growth of both in Q2 was partially due to the exodus from the office to home for millions of workers, as mentioned above. Perhaps the most interesting change has been a growth in the installed base of PCs by 5 million to 871 million in Q2 – although this is small, it indicates perhaps that there is a new – more important – role for desktop and laptop machines in future.
In a global market, we shouldn’t be surprised that growth rates are similar by region (see my Figure above which shows the quarterly change in spending on a rolling 4 quarter basis). It is noticeable that there was strong growth in the Americas in Q2 2020 – significant because that region is by far the largest consumer of these products.
There has been a massive consolidation of PC suppliers over the years, with only the largest surviving, sometimes by taking over the business of the national suppliers who had to give up because they lacked the economies of scale (or the ambitions) of the leading suppliers. See my Figure above for the development of market positions for the leading vendors, including a forecast for the whole of 2020.
Of these, Apple and Microsoft have been growing, Acer declining and Samsung level while HP Inc, Lenovo and Dell fight it out at the top. Product differentiation is almost impossible for most PC vendors, who are incredibly reliant on component manufacturers such as Intel, AMD, Quantum and Western Digital for product – and contract manufacturers such as Wistron and Foxconn for building – innovation.
My Figure above shows my latest data on shipment, revenue and installed base market shares for the year to the end of June 2020.
As for opportunities and challenges… we haven’t even scratched the surface of how we can further enhance the digital and virtual interactions we can achieve. Collaboration workloads such as Zoom, Microsoft Meetings and WebEx have been doing exceptionally well in recent months of course, but there are many other potential solutions involving online subscriptions to music and video content which can be enhanced through virtual reality software. Many schools and colleges have been forced to deliver online, as opposed to in-class teaching, but there are no real standards yet. Gaming has enjoyed a resurgence during the pandemic of course, but we need to go beyond entertainment and distraction to platforms which can help us get on with our lives.
On the down-side, the economic recession is already severe and certain to get worse as many furloughed workers are laid off by companies as government money runs out. This will inevitably lead to slacker demand for PCs.