Larry Dignan is the former Editor in Chief of ZDNet.
Full BioPC prices are likely to move higher in the second quarter and rest of 2021 as vendors pass along higher component and logistics costs amid strong demand.
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If earnings from HP, Dell Technologies and Lenovo are any indication, inflation is likely coming to the PC market in a perfect storm. Cisco already foreshadowed inflation for data center infrastructure.
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For PC market inflation the moving parts go like this:
- Demand for laptops has surged amid remote work and education and a new normal for work is emerging. Whatever the new normal turns out to be PC demand appears to be strong.
- There's a global chip shortage, but other components are in short supply. IDC cited a bevy of other components beyond CPUs that are hampering production.
- PC vendors manage their supply chains well, but executives noted that they will pass along higher costs.
- Lenovo, HP and Dell Technologies all reported strong financial results and said demand wasn't slowing. In addition, tech buyers haven't altered their behavior based on higher prices or supply chain delays.
Here's a tour of how PC leaders see the supply and demand balance playing out in 2021.
Dell Technologies
CFO Thomas Sweet made it clear that inflation was hitting the business. He said:
The supply situation has not kept up with the demand environment as we think about the need for semiconductors. And that's an industry-wide issue, and cl
View now at Dell
HP
HP is seeing pricing power in printing as well as PCs. Marie Myers, CFO of HP, said demand is strong. She said:
It's just all about demand outpacing supply and really creating that favorable environment. So, it's basically just the l
View now at HP
Lenovo
Gianfranco Lanci, chief operating officer of Lenovo, said inventory in the channel at record lows of 2 or 3 weeks. Inventory is usually at 6 to 8 weeks. Inventory is low in all of Lenovo's key regions. Lanci also addressed pricing. He said:
View now at LenovoBottom line: It remains to be seen how price increases will be handled by consumers. There's already a bit of a shift to desktops as notebook shortages take a toll. At some point, demand will be impacted by shortages and price increases.
The big wild card is whether the prospect of higher prices actually pushes demand forward.
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