Remote working and learning has given the declining PC market a fresh lease of life, thanks to the pandemic. While the pandemic battered several industries, it has also helped a few, and PCs and laptops have been one of its biggest beneficiaries.
Also, PC sales revved up on a surge in sales of videogames during the pandemic. Last year saw PC sales regain its lost territory with shipments increasing globally. The first quarter of this year too showed impressive growth in PC sales and the second quarter has been equally good.
PC Sales Grow in Q2
According to the latest report from Canalys, sales of PCs, which include desktops, notebooks and workstations, grew 17% on a year-over-year basis during the second quarter of 2021. Although sales are slower than the first quarter’s growth of 74%, the PC market is still doing well.
One major reason for sales slowing in the second quarter was microchip shortage. However, Canalys expects that the pandemic-led growth in 2020 and so far this year to continue.
Overall, 36.8 million units were sold in the second quarter, up 27% year over year. Desktop sales were up 23%.
PC Sales Poised to Grow HP Inc. ( HPQ Quick Quote HPQ - Free Report) was the best seller, with 21.9% of the market share increasing 20% year over year. Apple, Inc. ( AAPL Quick Quote AAPL - Free Report) came in second, with 20.6% of the market share, while DellTechnologies Inc. ( DELL Quick Quote DELL - Free Report) held the third spot, with 15.6% market share. Apple led tablet sales, with 456% share.
Demand for PCs grew in the first quarter of 2020 with the COVID-19 outbreak. However, supply came to a standstill as shipments had to be stalled after lockdowns were imposed by several governments. Shipments grew once the governments started lifting lockdowns, thus driving sales.
However, the microchip shortage is now hurting PC makers as well. Sales have been on the rise despite a global shortage of microchips. The supply chain has started to struggle due to a shortage of key components.
Not too many had expected the PC market to rebound ever since it started declining in 2008 after smartphones gained popularity. However, the pandemic has changed the entire ballgame again, with things working in favor of the PC market.
Moreover, fresh fears of the Delta variant of coronavirus are once again making governments across the world go slow on their reopening plans. This might continue to aid the PC market.
Stocks to Watch Apple, Inc.designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories worldwide. Its signature products include iPhone, Mac and iPad.
The company’s expected earnings growth rate for the current year is 70.4%. The Zacks Consensus Estimate for current-year earnings improved 7.7% over the past 60 days. Apple sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here. Dell Technologies Inc. is a provider of information technology solutions. The company's operating segment consists of Client Solutions, Enterprise Solutions Group and Dell Software Group. The Client Solutions segment includes sales to commercial and consumer customers of desktops, thin client products, notebooks as well as services and third-party software and peripherals of Client Solutions hardware.
The company’s expected earnings growth rate for the current year is 17.1%. The Zacks Consensus Estimate for current-year earnings improved 10.5% over the past 30 days. Dell has a Zacks Rank #3 (Hold).
Lenovo Group Ltd. ( LNVGY Quick Quote LNVGY - Free Report) is dedicated to building PCs and mobile Internet devices. Lenovo's business is built on product innovation, a highly-efficient global supply chain and strong strategic execution.
The company’s expected earnings growth rate for the current year is 71.4%. The Zacks Consensus Estimate for current-year earnings improved 24.5% over the past 30 days. Lenovo has a Zacks Rank #2 (Buy).
Alphabet Inc. ( GOOGL Quick Quote GOOGL - Free Report) has been one of the best performers in the PC market lately. One of the biggest reasons behind this is the success of Chromebooks, which has revolutionized the PC market once again. The company sold the maximum number of PCs in the third quarter.
The company’s expected earnings growth rate for the current year is 73.8%. The Zacks Consensus Estimate for current-year earnings improved 13.3% over the past 60 days. Alphabet has a Zacks Rank #3.