The channel is bracing itself for a troubled PC market next year, according to market watcher Context, as CPU supply problems and a slowing down of Windows 10 refreshes will cause problems for partners' hardware businesses.
That's according to market watcher Context, which claims to have analysed data collected from vendors, resellers and distributors on the health of the PC market.
Context claims that channel partners should expect a much weaker PC market in 2020 and expect sales to decline, especially in the second half of the year.
The market watcher warns that the strong commercial demand for new hardware that resellers have seen over the past 12 months will begin to wain next year.
It suggested that Windows 10 refreshes will begin to slow down after the Windows 7 end-of-life deadline passes in January 2020 and ongoing CPU supply problems from Intel will continue to negatively impact the channel.
PC vendors Dell, HP and Lenovo recently posted solid year-on-year growth in their PC businesses for their respective financial quarters. HP's PC business grew by eight per cent globally to $10.4 per cent in its Q4, Lenovo's PC and Smart Devices group had 4.1 per cent growth in its last quarter while Dell posted five per cent growth for its Client Solutions Group in its Q3.
But all three vendors have warned that CPU supply issues in the first half of 2020 will hurt PC sales next year.
Dell even downgraded its fiscal 2020 revenue forecast by as much as $2.7bn as the firm adopts a more cautious outlook for its fiscal 2021 as a direct result of the CPU shortages.
The expected downturn comes after a year of surprising growth for the PC market. Context reported that the PC market had grown by six per cent through distribution in the first two months of 2019, while Canalys claimed that Q3 sales were up by 4.7 per cent.
Global resellers have similarly benefited from healthy hardware and infrastructure sales this year, with channel titans Computacenter, Bechtle and Atea seeing steep growth to their hardware businesses.
According to Marie-Christine Pygott from Context, supply chain issues will have a knock on effect for resellers and their customers next year.
"It will be a challenge," she told CPI. "The main challenge is there is little predictability as to what product ranges are short in supply at what time, and that produces challenges for the channel and leads to stronger fluctuations in inventory because of the supply issues that presents.
"The expectation is, it is going to carry on into Q1 and Q2 in the New Year."
But there are some promising bright patches in the PC market's future, claims Pygott. She said that customers continue to digitally transform their businesses, which will have a positive impact on demand for PCs, laptops and 2-in-1s.
The analyst added that a growing demand and awareness for sustainable IT plays into the skillsets of resellers and opens an opportunity to provide ITAD and PC refurbishment services.
"These trends in refurbished systems is growing. It is definitely something channel players are looking at more and more. We have seen more sales coming through for refurbished systems and there is growing interest from that part of the market from a vendor perspective," she said.
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