The coronavirus pandemic has disrupted worldwide supply and demand for new PCs, bringing both bad and good news for computer recyclers and refurbishers, according to Gartner.
The markets research firm reports that, during the first quarter, shipments of new PCs around the world declined by 12.3% year over year. It was the steepest drop seen since 2013, and it came after three consecutive quarters of growth.
The data includes desktop and notebook PCs but not Chromebooks or iPads.
A press release from the company pointed to a number of factors affecting the market:
- Chinese challenges: Because of the lockdown in China that started in late January, fewer new PCs were produced. Later, logistics challenges added to the difficulty of getting those devices to market.
- Demand for remote work and study: Once the lockdowns spread to other regions, there was suddenly PC demand for remote workers and online classrooms. Gartner noted manufacturers couldn’t keep up with the demand. E-Scrap News recently reported the sudden demand for PCs and inability to get new ones helped drive demand for refurbished computers.
- Businesses slow IT spending: Gartner noted businesses are reducing their IT spending because of overall economic uncertainties, especially small and midsized companies. “This uncertainty, coupled with the end of the Windows 10 upgrade peak, is causing enterprises to shift their IT budgets away from PCs and toward strategic business continuity planning,” Mikako Kitagawa, research director at Gartner, stated in the press release. Kitagawa said organizations and consumers alike will extend their PC life cycles. That could delay those devices entering the recycling and reuse steam. Some ITAD companies are already struggling to access material because their customers’ offices are closed or IT staff have put asset disposition on the back burner.
- U.S. trends: Because the virus impacts were most apparent in the U.S. late in the first quarter, PC shipments in the U.S. grew slightly (0.8%) year over year. But shipments fell by 30.2% from the previous quarter.
Gartner isn’t the only firm to forecast a decrease in IT spending. International Data Corporation (IDC) launched a new index of indicators for IT spending, and the index points to lower overall tech spending in 2020. Enterprises responding to a survey generally indicated they expected to spend less on PCs, mobile devices, server/storage infrastructure and IT services, but they were more optimistic on their ability to keep funding investments in the cloud and technologies such as AI and the Internet of Things, according to IDC.
“There are individual examples of organizations increasing their IT spend on technologies such as laptops in order to support employees working from home, but the overall survey results support our view that total spending on those products will decline as many companies revert to contingency plans and cuts in capital spending,” Stephen Minton, vice president in IDC’s Customer Insights & Analysis group, stated in the release. “Cloud seems to be resilient with some firms continuing to increase their spending even while others focus on ways to cut costs in the short term.”
More stories about markets
- Chinese firm defaults on loan used to buy Ingram Micro
- California hikes payments for stressed e-scrap companies
- TerraCycle reports on earnings tied to e-scrap