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Coronavirus to Knock Down Global PC Sales

The coronavirus outbreak in China and elsewhere could cause global personal computer sales during the calendar year to decline by at least 3.3 per cent and going up to as much as 9 per cent, market research company Canalys says while revising its earlier projections about PC sales that it had released some months ago.

The report says PC shipments would decline between 10.1 per cent to 20.6 per cent in the first quarter of 2020.  It goes on to add that the impact would be visible from the second quarter when shipments could fall between 8.9 per cent and 23.4 per cent. Canalys puts the best-case shipment numbers at 382 million units in 2020 as against 396 million last year.

The worst-case scenario would be frightening as the research company pegs the absolute number at 362 million units over an entire year, which is 8.5 per cent lower than in 2019. The worst-case scenario assumes that production levels will not return to full capacity by June 2020 in which case, “production and demand levels in China will take even longer to recover and Q2 will suffer a decline on par with Q1 as a consequence,” says the report.

“In the best case, production levels are expected to return to full capacity in April 2020, therefore, the greatest impact will be to sell shipments in the first two quarters, with the market recovering in the third and fourth quarter, “said the company says.

Canalys expects the PC markets to normalise in the third quarter of 2020 with recovery starting only in 2021. Given that China is among the largest PC markets, the researchers expect matters to spiral out with sales declining by as much as 12 per cent year-on-year and a recovery happening only as late as in 2024.

The researchers said the coronavirus outbreak also resulted in shortages of PCBs and memory cards in China and other markets with channel partners receiving notifications from leading PC makers over the past two weeks that their shipments and spares would be late by as much as 14 weeks – more than treble the usual delivery time.

The virus outbreak has also affected several other industries such as smartphones with key Apple supplier Foxconn already posting a revenue warning for 2020 due to the Wuhan virus that forced the company to expand its capacity across other geographies such as India, Mexico and Vietnam.

Just a week ago, Apple too had cut down revenue guidance for the March quarter over limited supply of iPhones and low demand from China due to closure of several stores.

The report says that the impact of PC shipments is likely to be immediate with vendors expected to book production capacity in advance, anticipating the short supply and are likely to prioritize business-critical portfolios. Canalys says it expects “vendors to focus on high-value commercial products while paying special attention to the low-cost volume categories that will ensure preservation of market share.”

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