At the start of the COVID-19 pandemic, the rush to work from home created a run on personal computers that pushed demand much higher than it had been for some time. That demand is still elevated but is now being joined by commercial demand for computers as employers seek to bring employees back to the office. Maria Armental reports for The Wall Street Journal:
A pandemic-fueled run on computers helped HP Inc. HPQ +1.88% and Dell Technologies Inc. DELL +2.13% deliver strong financial results for the latest quarter despite a semiconductor shortage that is denting some industries.
Dell on Thursday reported that first-quarter revenue rose 12% to $24.5 billion from a year earlier driven by a 42% jump in consumer revenue within the client solutions group that includes desktops and notebooks. The strong start to its business year comes after Dell, in February, reported record full-year revenue.
Personal-computer sales registered their strongest growth in a decade last year, underscoring a shift from mobile devices brought on by the coronavirus pandemic, according to industry data. PC shipments overall rose 13% in 2020 and are expected to increase 18% in 2021 despite the semiconductor shortage, according to International Data Corp.
“We continue to see very strong demand on the consumer side, and the demand on the commercial side is also starting to strengthen as offices reopen,” said HP Chief Executive Enrique Lores.
HP expects personal computers to remain a hot item into next year, he said Thursday, as the company posted a roughly 27% jump in second-quarter revenue and raised its full-year earnings outlook. Consumer sales increased strongly, rising 72% in the computer business and 77% in the printing segment, the company said.
The global semiconductor shortage, Mr. Lores said, is likely to persist throughout the year, helping extend the boom time for laptop sales into 2022, a view shared by Dell.
The strength of demand has been echoed by others. Intel Corp. Chief Executive Pat Gelsinger, who previously led Dell’s majority-owned VMware Inc., pointed to the PC resurgence during the chip maker’s first-quarter earnings call in April. The company had shipped a record number of notebook central processing units during the prior quarter, he said.
“And as the world becomes more digital, I believe we have 10 good years of semiconductors in front of us,” he said at an industry event this month.
Read more here.