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Supply issues hit global PC sales

Second quarter blighted by more production issues in China, which hit shipment levels

Life in the PC business is very much a case of “if only”, as the factors undermining success continue to plague the hardware market.

Not only has the industry had to cope with component shortages, but with China resorting to using lockdowns to curb the spread of coronavirus, those supply issues have been exacerbated during the second quarter.

A market analysis from Canalys has found that global PC shipments fell by 15% in Q2, largely because of Chinese production issues. The decrease took the market back to its lowest level since the pandemic began to take hold in Q1 2020.

Laptops suffered an 18.6% drop, with consumers showing more caution with inflation and the cost of living causing some falls in demand. Desktops fared better, with a 0.6% increase, driven by commercial spending on hardware.

“As expected, Covid lockdowns in key regions and cities of China throughout most of Q2 severely affected the manufacturing and export of PCs,” said Canalys analyst Emma Xu.

“Disruption to factory and port operations in Shanghai, Kunshan and Jiangsu led to significant delays in orders for all the major PC vendors. Though production and coordination started to improve by the end of May, output was below normal levels throughout Q2.”

In terms of vendors, the main three held on to their leading positions, with Lenovo ahead of the pack, followed by Dell and HP.

Cost-of-living concerns have had an impact on demand, particularly from consumers, and those market conditions are not looking like easing anytime soon.

“Worsening inflation is the dominant economic factor on consumers’ minds, and price increases across a basket of goods and services are relegating spending on PCs and other hardware behind more basic needs,” said Canalys senior analyst Ishan Dutt. “While the importance of having a top-quality device hasn’t diminished, most PC owners with relatively basic computing needs will be content to ride out this period of economic uncertainty and opt to refresh their devices when the pressure on their budgets eases or if significant discounting by vendors and retailers occurs later in the year.

“Businesses are also facing the threats of inflation and rising interest rates, but investment in PCs and IT at large remains vital to digital transformation as part of post-Covid recovery. Vendors with strong commercial reputations, deep channel partnerships and portfolios geared toward high-performance business use cases will be best placed to mitigate the challenges facing the PC industry this year.”

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