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PC shipments sink amid steady waves of supply chain, war disruptions

320 million units forecast, still well above pre-pandemic, but boom is over for now

Orders for PCs are forecast to shrink in 2022 as consumers confront rising inflation, the war in Ukraine, and lockdowns in parts of the world critical to the supply chain, all of which continue.

So says IDC, which forecast shipments to decline 8.2 percent year-on-year to 321.2 million units during this calendar year. This follows three straight years of growth, the last of which saw units shipped rise to 348.8 million.

Things might be taking a turn for the worse but they are far from disastrous for an industry revived by the pandemic when PCs became the center of many people's universe. Shipments are still forecast to come in well above the pre-pandemic norms; 267 million units were shipped in 2019.

"On top of the compounding issues related to the pandemic, we have now added war, inflation, and ongoing China lockdowns to the equation," said Ryan Reith, IDC group veep of the Worldwide Mobile Device Tracker.

He said the tech analyst's data continues to "show strong demand and supply activity aimed at the commercial PC market, but the consumer and education markets are seeing increased concerns and, as a result, reduced orders."

Shanghai just came out of lockdown recently but, according to reports, parts of China's largest city are already resuming the shutdown.

The wheels came off the Chromebook business in Q3 last year as the US schools sector neared saturation point – American sales account for 70-80 percent of Chromebook shipments. Q4 and Q1 were also weak for the form factor.

IDC forecasts tablet sales to decrease by 6.2 percent in 2022 to 158 million worldwide.

Marco Andresen, chief operating officer at Lenovo, told The Register that he largely agrees with IDC's summary of events but reckons they are perhaps being a little pessimistic.

"I still see good traction in B2B," he added. "But [at a] high level I agree with the statements of shipments [being] slightly down." Andresen said he expects revenues generated by sales to be "positive."

Talk of this decline might have spooked Intel, which is believed to be initiating a hiring freeze in its PC division, according to Reuters, which quoted an internal memo saying "pausing all hiring and placing all job requisitions on hold."

This is supposedly for two weeks.

A report from Finder, which provides financial advice, found economists were evenly split on whether a recession will happen in the next 18 months or not at all. Rising interest rates are also putting a squeeze on many households.

Speaking at Bernstein's 38th Annual Strategic Decision conference, HP CEO Enrique Lores said he expects market revenues to grow between 1 to 3 percent in 2022 and for shipments to dip.

"We don't think the market is going to collapse in terms of units. It's not going to continue the growth we have seen. So it's going to stay stable, slightly declining, but again revenue will – or prices will help on the other direction.

"What we see is a shift towards more premium categories, towards highly – more highly configurable products, higher mix to commercial, and this is driving prices to go up."

Yvonne McGill, Dell senior veep and CFO, expects shipments to be 330 million this year, helped by enterprises refreshing models.

"We believe PCs are an essential productivity tool for business and for life and a great laptop, we believe is the key differentiator for companies as they compete for talent and, people are more mobile now. More mobility means more notebooks. We like more notebooks because more notebooks means faster replacement cycles. And so we see that carry forth and really helping to sustain the market projection level at that 330 million unit level." ®

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