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PC market growth affected by ongoing supply issues

Why it matters: Adoption rates for products in multiple industries received a boost during lockdown. The PC market was one category that experienced exponential growth due to the pandemic, but the sales momentum is now being affected by supply chain issues.

According to a report from IDC, global shipments of PCs, which includes desktops, notebooks, and workstations, reached 86.7 million units during the third quarter of 2021. That represents a 3.9 percent increase from 2020, as well as marking the sixth consecutive quarter where the PC market has grown. It’s a different outlook for shipments in America, though.

“Bottlenecked supply chains and ongoing logistic challenges led the U.S. PC market into its first quarter of annual shipment decline since the beginning of the pandemic,” said Neha Mahajan, an IDC senior research analyst.

“After a year of accelerated buying driven by the shift to remote work and learning, there’s also been a comparative slowdown in PC spending and that has caused some softening of the U.S. PC market today. Yet, supply clearly remains behind demand in key segments with inventory still below normal levels,” Mahajan added.

Dell Technologies was one of the PC manufacturers that was largely unaffected compared to its competition, growing 26.6 percent in Q3 by shipping 15.18 million units. Apple grew by 9.9 percent with the shipment of 7.645 million Macs.

Not faring as well as its rivals, HP decreased by 5.8 percent, while Lenovo shipments grew by 3.1 percent. Taiwanese hardware firms Asus and Acer grew by 3.6 percent and 1.4 percent, respectively.

“The PC industry continues to be hampered by supply and logistical challenges and unfortunately these issues have not seen much improvement in recent months,” said Jitesh Ubrani, IDC research manager. “Given the current circumstances, we are seeing some vendors reprioritize shipments amongst various markets, allowing emerging markets to maintain growth momentum while some mature markets begin to slow.”

The lockdowns that ensued because of the pandemic resulted in shipments of PCs in 2020 reaching growth levels not seen since a decade earlier in 2010. However, the shortage of semiconductors has been impacting prices for components, inevitably softening sales for the computer industry.

Motherboard prices, for example, could rise due to the reduced supply of copper. Excessive demand for GPUs and CPUs has also led to chipmakers increasing prices, which we’ve already seen with costs for graphics cards soaring.

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