PCs are pandemic-primed for bigger role

Does the boom in sales over the past year signal a permanent rather than just a pandemic revival for the personal computer?

Lex errs towards the latter conclusion. Two years is enough time for home workers to upgrade their kit, it says, meaning the pandemic-driven surge will stall. PCs last longer than smartphones, so frequent repurchases will not drive sales.

But analysts point out that the move to working from home has meant the pie is bigger. Purchases for remote working were not replacements and their users represent a growing pool of demand.

Research firms reported fourth quarter and full-year PC shipment figures this week, with Ishan Dutt, senior analyst at Canalys, describing it as a “watershed year” of double-digit growth following on from an impressive 2020, despite the constant cloud of supply constraints.

There were large increases in PC penetration and usage rates. “PCs are now in the hands of both young students and older family members,” he said.

“Since the onset of the pandemic, a larger than normal proportion of PCs shipped have been new additions to the installed base rather than replacement devices, especially in areas such as education and remote work. This has set the stage for continued success for the PC industry as there is no turning back from how embedded they are in our day-to-day lives.”

IDC analyst Jutesh Abrani agreed. “We continue to believe the overall PC market has reset at a much higher level than before the pandemic,” he said. While Gartner research director Mikako Kitagawa feels this is likely to be the end of the massive growth triggered by coronavirus, demand had lifted prices and created a healthier market, he noted. “As a result, annual PC shipment volumes are not expected to decline to pre-pandemic levels for at least two to three years,” he said.

The firms have different ways of measuring the market. Gartner said shipments declined 5 per cent in the fourth quarter but grew 10 per cent for the year to 340m units. IDC said they grew 1 per cent and 15 per cent respectively, to 348m units for the year. Canalys agreed on 1 per cent and 15 per cent, but for 341m units for 2021. All agree on the top five PC makers: Lenovo, HP, Dell, Apple and Acer in that order.

The PC market lacks innovation in form factors, with the contortions of folding screens appearing to have reached their limit, but manufacturers have been experts in segmenting the market to reach the broadening spectrum of users. There is a price and a PC for everyone, from a Chromebook for children and the elderly to high-end PCs for gamers. Add to that the homeworking revolution and the PC’s status and continued relevance seems assured.

The Internet of (Five) Things

1. Ukraine hit by ‘massive cyber attack’
Russia is the prime suspect as the source of an online attack that brought down around 70 Ukrainian government websites. The US said proof of a Russian cyber attack “certainly” would be classed as an example of renewed aggression against Ukraine, which could trigger sanctions against Moscow.

2. Google bets on return to office work
Google has said it will spend $1bn to purchase its office building near London’s Tottenham Court Road, in a big bet on its employees coming back to work. The Silicon Valley giant is making the move even though it is also building a huge new headquarters in nearby King’s Cross because it believes in the office “as a place for in-person collaboration and connection”.

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3. Bolt raises fares for London rides
The ride-hailing app Bolt has raised its prices in London by 10 per cent, bringing it in line with rival Uber, as tighter regulations and a shortage of drivers send costs higher.

4. Potential Ant backer pulls out
Jack Ma’s Ant Group has suffered a setback to its government-led restructuring efforts after a state-owned asset manager unexpectedly pulled out of a deal to invest in the fintech’s lending arm. China Cinda Asset Management, controlled by the country’s finance ministry, was set to invest Rmb6bn ($946m) in exchange for 20 per cent of Ant’s loans business, but said it was withdrawing after “prudent commercial consideration and negotiation with the Target Company”.

5. Whither tech stocks?
The Nasdaq is off to a shaky start in 2022, says Richard Waters, and there is plenty of scope for the market to take a bigger bite out of the most inflated valuations. But it is far too early to say that the January adjustment represents a deeper shift in the tech industry’s fortunes. Rob Armstrong’s Unhedged newsletter examines the trope that rising rates means falling growth stocks.

Tech tools — Lenovo Thinkbook Plus Gen 3

I was talking about contortions of PC displays earlier and here’s one example from CES in Las Vegas last week. With the ThinkBook Plus Gen 3, Lenovo has introduced the industry’s first 17.3in laptop with a built-in secondary 8in display. The ultra-wide 21:10 aspect ratio primary display is coupled with the second touch-enabled display, which has an integrated digital pen. Examples of using it include a supersized calculator on the second screen or mirroring of your smartphone’s display there.