COVID-19 pandemic continues to shake IT industry
The tech industry continues to take a beating from the coronavirus pandemic, with shipments of devices – PCs, tablets, and smartphones – expected to decline 13.6% this year, according to Gartner analysts.
The Lowdown: In a report Tuesday, the market research firm said in all, more than 1.8 billion devices will ship in 2020, compared with more than 2.1 billion last year, despite a rush on PCs when the COVID-19 outbreak sent many employees to work from home over the past few months.
The Details: Overall, the number of PCs that will ship will decline 10.5%, the analysts said. The decrease in tablets and Chromebooks will be slower. The number of mobile phones that will ship will fall from more than 1.7 billion in 2019 to just under 1.5 billion this year, a decline of 14.6%. Smartphone shipments will fall 13.7% to 1.3 billion units this year.
The Gartner report also found:
> Device shift: 48% of employees likely will work remotely at least part of the time after the pandemic, a jump from the 30% that did so before the global outbreak. The trend will make IT departments shift to more notebooks, tablets, and Chrome devices for work. Business notebooks will displace desk-based PCs through 2021 and 2022.
> Longer lifetimes: Pandemic-driven government lockdowns have led to employees using their mobile phones more to communicate with co-workers, friends, and families. However, they also have meant a reduction in disposable income, so people are hanging onto their phones longer. The lifetimes of mobile phones will grow from 2.5 years in 2018 to 2.7 years in 2020.
> 5G phones: Affordable 5G phones were expected to fuel a growth in new mobile phone purchases in 2020, but the COVID-19 crisis has put that off. According to Gartner, 5G phones this year will represent only 11% of all mobile shipments. China may be the exception, however. The country’s continued investment in 5G infrastructure will make it easier for providers in the country to market 5G phones.
The Impact: The pandemic will have far-reaching impacts on the business world, accelerating such trends as working from home and digital transformation. The IT industry will take a hit from the outbreak, with Gartner expecting overall 2020 spending to fall by 8% over 2019. The sharp decline in device shipments is part of that trend, which will have a ripple effect from the vendors out through the channel.
Background: Gartner’s report echoes what other firms have found. As far back as February, TrendForce, an analyst firm that focuses on the supply chain, said that the supply chain issues in China caused by the outbreak would lead to a shortfall in PCs, smartphones, and Internet of Things (IoT) devices.
The Buzz: “The forecasted decline in the PC market in particular could have been much worse,” said Ranjit Atwal, senior research director at Gartner. “However, government lockdowns due to COVID-19 forced businesses and schools to enable millions of people to work from home and increase spending on new notebooks, Chromebooks, and tablets for those workers. Education and government establishments also increased spending on those devices to facilitate e-learning.”
“The delayed delivery of some 5G flagship phones is an ongoing issue,” said Annette Zimmerman, research vice president at Gartner. “Moreover, the lack of 5G geographical coverage along with the increasing cost of the 5G phone contract will impact the choice of a 5G phone.”