Opinion: The PC pandemic growth remains to be on, however two risks loom

After greater than a 12 months of the COVID-19 pandemic, persons are nonetheless shopping for private computer systems in droves, however PC makers face rising prices to construct new machines as the specter of a sudden drop in costs. demand is looming.

HP Inc., HPQ,
Dell Applied sciences Inc. DELL,
+ 0.04%
and Lenovo Group 992,
+ 1.03%
all reported good outcomes this week because the PC gross sales pandemic continued. Lenovo, the main China-based PC maker, noticed a staggering 400% income development to $ 15.6 billion in its most up-to-date quarter, its quickest development in almost a decade, whereas that Dell’s shopper gross sales have blown estimates away; and HP has continued to thrive.

“I feel the primary distinction is folks, they’re beginning to understand… they want one PC per particular person and never one PC per home,” mentioned Gianfranco Lanci, president and chief working officer of Lenovo, when requested in regards to the firm’s outcomes, referred to as if there had been any modifications within the shopper market. “We’re fairly optimistic,” he mentioned, from “what we’re seeing when it comes to development,” including that market analysis information confirms that development will proceed for a number of quarters.

The market analysis agency IDC additionally sees its development proceed this 12 months, whereas reporting that PC shipments have elevated at an astonishing 55.2% year-over-year. The group additionally just lately famous, nonetheless, that part shortages will possible be a subject of dialog for almost all of 2021, however the greater query ought to be what PC demand will appear to be two to a few years from now.

Learn extra: The pandemic has introduced the private pc again to life, with assist from Zoom

Analysts on the three enterprise calls have expressed considerations about how lengthy the robust demand will final and what corporations are seeing out there. However the greatest and most quick concern was how the business is being hampered by chip shortages and different part provide points.

“It is clearly a fluid surroundings,” Dell CFO Tom Candy mentioned on a convention name Thursday afternoon.

“We’re very optimistic in regards to the alternatives for the following few years within the PC house,” added Candy. “However there may be work to be achieved within the brief time period as we work our means by means of the part scarcity.”

Dell’s better-than-expected outcomes embody a 42% bounce to $ 3.5 billion in shopper PCs and associated gross sales, whereas enterprise gross sales rose 14% to $ 9.8 billion. HP reported 27.3% development to file income of $ 15.9 billion, and executives spoke of a powerful second half, but in addition addressed prices that would squeeze margins.

“We’re prone to see larger product and logistics prices, which can probably influence our capability to satisfy demand,” mentioned Enrique Lores, CEO of HP. “After which lastly, there are seasonal headwinds within the second quarter, reminiscent of in sourcing, as a result of the second quarter is usually our strongest quarter for provides.”

As extra corporations slowly reopen their workplaces, buyers concern the pandemic-fueled shopper shopping for growth will decelerate, though executives have mentioned it might additionally immediate corporations to improve a few of their gear. Workplace. The PC business has had a uncommon 12 months of robust gross sales development, however buyers are proper to be cautious of what occurs when the growth ends.

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