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PC makers are banking on a new normal

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Most industry analysts agree that long-term PC sales are unlikely to drop back to pre-pandemic levels.


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Richard B. Levine / Newscom / ZUMA Press

The boom caused by the pandemic for the personal computer industry is over. The big question now is where the market is going.

Global PC sales averaged around 265 million units per year in the five-year period before the pandemic began in 2020, according to IDC. That number rose to 302.6 million units in 2020, as the pandemic sent workers and businesses rushing to prepare for working from home. The rush continued for much of this year, and IDC expects it to end with more than 340 million PC units shipped.

It would be the best year for the industry since 2012, but it also reflects a noticeable slowdown already underway. Third-quarter PC sales were up less than 4% year-on-year after five consecutive periods of double-digit gains, according to IDC data. And the company’s annual projection suggests a 4% drop in the fourth quarter is likely. IDC and rival Gartner both point to supply issues caused by the shortage of chip production as limiting some sales, although both also admit that demand has slowed in some segments. Gartner claims that shipments of laptops and Chromebooks in the United States fell 10% year-over-year in the third quarter.

The key question now is whether PC sales in general are falling to their pre-pandemic standard or stabilizing at a new, higher level. A case for the latter is convincing. The adoption of long-term hybrid work arrangements that allow employees to move from the office to the home frequently means that more workers will need more than one computer. It could also mean a bigger market for devices like webcams and speakers as the long-term reality of frequent Zoom calls sets in.

HP HPQ -0.26%

and Dell are betting on it. At its analyst meeting on September 23, Dell forecasted average annual growth of 2-3% for its PC segment over the next five years, with Customer Solutions segment president Sam Burd saying, “The industry of PCs has returned to a higher level ”. HP seems likely to boast a similar message at its own analyst meeting next week; CFO Marie Myers told a Citi conference last month that the company had great confidence in the prospects for its PC business, noting that the addressable market had “really grown.”

Most industry analysts seem to agree. IDC and Gartner both forecast PC shipments of over 340 million units in 2022, and IDC predicts that this will persist through 2025. TrendForce, which predicts a 7% drop in laptop unit sales in 2022, added in its updated forecast released Tuesday that the laptop market “will experience some growth in the medium to long term, without falling back to pre-pandemic levels.”

At least working from home is a snap for some.

Write to Dan Gallagher at dan.gallagher@wsj.com

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Appeared in the print edition of October 14, 2021 under the title “PC Makers Plan on a New Normal”.

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