The Great PC Renaissance of 2020 (Premium)

A Reuters report claims that component makers won’t be able to fulfill the unexpected pandemic-based demand for PCs until 2022. That’s good news for PC makers and fans of the platform. Assuming that it’s true.

As many readers know, I’ve been tracking quarterly and annual PC sales for many years, and I average the sales estimates provided by Gartner and IDC because these are the two most well-respected analyst firms that cover this market. But this averaged data is, at best, a rough estimate since both companies have their own methodologies and include (or don’t include) certain device types, like Chromebooks.

And there are, of course, other firms providing their own data, like Canalys, that I don’t know as well and thus don’t trust as much, and don’t typically report their findings. But whatever: Canalys estimates will often differ from those from Gartner, which will, in turn, differ from those from IDC, and from other firms. Whichever data you choose to use and trust, there will be differences.

The point of all that is that the Reuters report is interesting from a broad strokes perspective, but like all predictions and analyses, there’s no hard truth, just a hope that there are some reasonably true generalizations. What the data I use shows is that the PC has been in decline since its apex in 2011, when roughly 365 million PCs were sold. But the rate of decline has slowed in recent years, and we even saw a barely measurable uptick in 2019. I long referred to this long-anticipated milestone as a plateauing, meaning we would one day reach a “new normal” in PC sales, and that future declines would be small.

What that means in hard numbers—which again, are just estimates of my own creation based on data from Gartner and IDC—is that the PC market had settled in at about 264 million units sold in 2019. That’s over 100 million units that the PC market experiences in 2011, meaning that the market had shrunk by about 28 percent in roughly a decade. It’s almost one-third smaller than it was in 2011.

And then the pandemic happened.

For all the awfulness that was 2020—and to be clear, this year was nothing less than a shitshow—one of several silver linings was the renewed sense on the part of many individuals that the PC isn’t just important, it’s vital. This reawakening was, to me, as refreshing as Microsoft’s plans to refocus on traditional PC form factors in Windows 10 (while continuing to invest at lower levels in things like tablets and smartpens, and in new form factors too).

I assume it’s obvious to everyone, however, that the pandemic’s effect on the perceived relevancy of the PC is, while not temporary, not a cure-all. The PC isn’t going to start selling better and better each year and reach and then surpass its 2011 apex. That said, there’s no reason that the pandemic can’t help reset that plateau, that new normal, to a slightly higher level. Maybe a unit sales figure somewhere above 264 million units is sustainable.

We’ll see.

For now, let’s look at some of the information that Reuters published.

First, an Acer executive told the news agency that “the whole supply chain has been strained like never before” during the pandemic, leading to component shortages and thus PC (and Chromebook) shortages. This is well understood: PC and Chromebooks have been in short supply all year, though the mix has shifted over time. In the beginning of the pandemic, PC and peripheral sales were dictated by the needs of working from home, but by the back-to-school season, that demand had shifted to less expensive (and thus less profitable) PCs and Chromebooks.

There were indications that hardware makers had caught up with demand by the end of the year, and that we’d likely see a return to something close to normal in 2021. But the key point of this new report is that that isn’t necessarily the case: “Manufacturers still are months away from fulfilling outstanding orders, hardware industry executives and analysts said … Laptop [and] desktop shortages won’t ease until 2022.”

“Some analysts” now believe that PC sales will hit close to 300 million units this year, which would represent a dramatic 28 percent improvement over the number I use for 2019. And while Reuters says this would be a 15 percent improvement, since it uses different estimates, I think it’s fair to say that a double-digit improvement in 2020, regardless of the exact figure, would be impressive.

Reuters also claims that the installed base of “PCs and tablets” could reach 1.77 billion units by the end of 2020, up from 1.64 billion in 2019, using numbers from Canalys. Here, I assume the report is including iPad and related tablet sales in the total, but the size of the PC market is roughly that large not including tablets (given over 1 billion Windows 10 PCs and the size of Windows 7’s usage share), so this is one of those gray areas when it comes to understanding the data.

But whatever. Here’s the general truth provided by Reuters: “The virus pressed families into expanding from one PC for the house to one for each student, video gamer or homebound worker.” Yes. I love that.

I’m also interested in Reuter’s assessment that the biggest PC makers “added suppliers, sped up shipping, and teased better models launching next year.” I certainly experienced the latter part of that claim: HP and Lenovo, especially, the world’s two biggest PC makers, overwhelmed me and other reviewers in this already trying year with a blizzard of product announcements that I believe to be unprecedented. When I complained about this to friends at these firms, I was told that we were all adapting to these unprecedented times.

That’s fair, but it’s also fair to point out that PC makers, like any other companies in this position, are likewise right to seize the opportunity and meet what can only be described as unexpected demand.

Leaving aside some of the anecdotal information in the report—like a Canalys analyst recalling a customer telling a vendor in April that “any device with a keyboard would suffice as long as shipments arrived in a week”—I enjoy that Dell president Sam Burd told Reuters this month that the PC industry was experiencing a “renaissance” that will—already is, from what I can see—result in dramatically better PCs with pragmatic new features that will “simplify tasks like logging on and switching off cameras.”

For this fan of the PC, that’s heartwarming. Sure, PC makers are going to sell more PCs this year than they have in several years, and good for them. But the real benefit to this year’s PC renaissance is to the customers who will be using these new PCs for years to come. PCs are better than ever, and as we’ll soon see at next month’s CES, they’re about to get better again still.

It’s enough to make me almost forget how incredibly terrible this past year has been. Almost.