Opinion platform of Jorge Díaz-Cardiel, managing partner of Advice Strategic Consultants
The second wave of COVID-19, hitting many countries along with companies preparing for longer-term remote work environments, has pushed PC shipments to levels not seen since 2011, according to analyst firms.
Global shipments of laptops and mobile workstations in the third quarter of 2020 were 28.3% higher than a year ago, helping drive total PC shipments up 12.7% year-on-year to 79.2 million units.
The PC sector sold 64.6 million laptops (includes Chromebooks, but not tablets or removable ones). However, the shift to remote work reduced desktop shipments by 26% compared to a year ago.
This quarter’s growth in PC shipments outpaced the 9% year-over-year growth in PC shipments in the second quarter of 2020.
The pandemic has brought mixed results for Microsoft, which is experiencing a slowdown in demand from smaller companies but higher spending from large companies in the fourth quarter of fiscal 2020.
Smaller business stagnation and business closures resulted in Windows OEM professional revenue falling 4% year-over-year, while Windows OEM non-professional revenue increased 34% in the quarter.
On the other hand, people spend more time on their computers: more than four trillion minutes are spent on Windows 10 per month, an increase of 75% year over year.
Lenovo sold the majority of its PCs in the third quarter of 2020, with 19.27 million units, an increase of 11.4%, leaving it with a 24.3% market share. HP sales grew 11.9% compared to last year to 18.66 million units, resulting in a 23.6% share of the PC market. Dell sold 11.99 million units and has a 15.1% market share, but its sales are down 0.5% compared to the previous year. Apple’s Mac sales grew 13.2% to 6.37 million units, giving it an 8.1% share of the PC market and fourth place. Acer’s shipments grew 15% to 5.64 million units.
Bottom line: Laptop sales soared in the last quarter, with Lenovo and HP grabbing half the market.
Apple is a world apart. The company reported Mac sales of $ 7.08 billion in its third-quarter update in July, up 22% from a year ago. IPad sales also increased 31% to $ 6.58 billion.
“Vendors, the supply chain and the channel have now had time to stand up and allocate resources for the supply of laptops, which continue to be in massive demand from both businesses and consumers.”
The industry recognizes that remote work will require providers to focus on mobility, connectivity, battery life, and screen and audio quality. Growth is expected in computing for the educational market and mainstream games.
The next quarter also appears to bring positive news, as consumer spending during the holiday season increases computer sales.
The high demand for laptops as people work and learn remotely helped HP Inc. and Dell Technologies Inc. soften the impact of a slowdown in spending on office equipment during the coronavirus pandemic.
HP reported that laptop sales rose 30% in the July quarter from a year earlier, helping the company limit its revenue decline to 2%, as it reported $ 14.29 billion in sales, surpassing Wall Street’s projection of $ 13.34 billion. The drop was driven by the printer business, as well as lower sales of desktops and workstations, and companies invested less in office equipment because employees work from home.
Meanwhile, Dell said consumer revenue was up 18% for the business that includes computer sales, while commercial customer sales fell 11%. Overall revenue, like HP’s, fell 3% to $ 22.7 billion.
“We saw strength in the government and education sectors, with orders increasing 16% and 24%, respectively, as parents, teachers and school districts prepare for a new frontier in virtual learning,” said the director of operations. Dell’s Jeff Clarke in a statement. .
The pandemic has also posed problems for the two tech companies due to lower spending on office equipment. Dell saw sales of servers and data storage equipment drop, the company said, and customers shifted spending to facilitate remote work.
HP says its printing business, smaller in revenue than the computer business but generally more lucrative, saw sales drop to $ 3.93 billion, driven by lower sales of printers and supplies.
The consumer printer market, however, was a bright spot, with people trapped in home buying devices. Chief Executive Enrique Lores said those sales should boost the printing business as people return to buy more ink and other “consumables.”
Earlier this year, HP warned that the last quarter would be more difficult than the previous one for the company’s printing business as corporate customers cut spending on office equipment. Enrique Lores said that the supply chain challenges the company encountered during the pandemic affected printer sales early in the quarter, particularly on the consumer side. But, the CEO said, the consumer printing business, which posted a 7% revenue increase in the quarter, should strengthen. Furthermore, he said, commercial print sales, while still low, were improving and supply chain problems had lessened.
Xerox Holdings Corp., which last year launched an unsuccessful hostile takeover offer for HP, saying the printing industry was decades behind in consolidation, reported that its sales in the most recent quarter fell by more than a third from the previous year.
Laptop and tablet sales drive sales for HP, Dell and Apple
With so many people working, learning, and playing at home, you might think laptop and tablet sales would be strong. And you would be right.
HP and Dell reported quarterly earnings showing strong laptop and gaming system sales.
And market watcher IDC just reported that Western European unit shipments of “detachable tablets” – that is, tablets with dockable keyboards – were up 170% in the third quarter of the year. By supplier, Apple rules the roost.
HP: notebooks on the rise
HP reported its fiscal fourth quarter earnings yesterday, and overall, things are pretty heavy. Total revenue reached $ 15.3 billion, a drop of one percentage point from the prior-year quarter.
Similarly, the company’s personal systems group reported fixed revenue of $ 10.4 billion. That was despite unit shipments rising 7% year-on-year. In other words, the average selling price (APC) has dropped.
In the fourth quarter, laptop revenue increased 18% while laptop unit shipments increased 25%. Desktops, however, declined: unit shipments fell 31% and revenue fell 28%.
Another way to look at it: HP’s fourth-quarter notebook revenue accounted for nearly half of the company’s total revenue. Desktop computer revenue was just 15%.
Dell: double digit growth
Things were a bit brighter at Dell, which reported earnings for its fiscal third quarter. The company reported total revenue for the quarter of nearly $ 23.5 billion, a 3% year-on-year increase.
Things were even brighter for Dell’s Customer Solutions group, which is Dell’s language for PCs. It reported record shipments, record revenue of $ 12.3 billion and record operating income of $ 1 billion.
Of those $ 12.3 billion in PC revenue, 28% came from consumer sales, while the remaining 72% came from commercial sales. In dollars, consumer sales in the quarter totaled $ 3.5 billion, a year-on-year increase of 14%. And commercial sales totaled $ 8.8 billion, an increase of 5%.
Dell says it enjoyed double-digit growth in most of its consumer and business lines, as well as gaming systems.
More specifically, Dell’s business PC revenue was driven by double-digit growth for Latitude and Precision notebooks, and triple-digit growth for business Chromebooks.
Consumer revenue was driven by double-digit growth in the XPS and Alienware premium gaming systems, both notebooks and desktops.
Do all those kids go to school from home now? They (or maybe their parents) are buying a lot of tablets.
New figures from market watcher IDC show that unit shipments of detachable tablets in Western Europe increased 170% in the third quarter of this year, which ended on September 30. These devices now account for 40% of all tablets shipped in the region.
By contrast, third-quarter unit shipments of slate tablets (that is, those without a keyboard) in Western Europe fell 16%, according to IDC.
By verticals, education is now the fastest growing sector in the region for tablet sales. Total tablet shipments to the Western European education market in the third quarter increased 89%, according to IDC.
By vendor, the loot goes to Apple. IDC says the company’s share of the Western European educational market for tablets has risen to a dominant 64%.
Apple also dominates the overall tablet market, with a share of nearly 32% in the third quarter, IDC says. The market watcher says Apple shipped more than 2.6 million tablets in the region during the quarter, a year-on-year increase of nearly 31%.
Jorge Díaz-Cardiel. Managing Director of Advice Strategic Consultants. Economist, Sociologist, Lawyer, Historian, Philosopher and Journalist. He has been Managing Director of Ipsos Public Affairs, Managing Partner of Brodeur Worldwide and Porter Novelli International; Director of Sales and Marketing for Intel Corporation and Director of Investor Relations for Shandwick Consultants. Author of thousands of articles on economics and international relations, he has published around twenty books on economics, innovation, digitization and business success. He is the 1991 Economy Award