The prolonged shutdown of the Chinese factories due to the outbreak of COVID-19, commonly known as coronavirus, is likely to impact the worldwide PC market. Research firm Canalys in its recent client PC shipment forecast estimates has presented two scenarios, for the best and worst cases, representing the minimum and maximum level of impact of the COVID-19 outbreak. While the best-case scenario will witness a decline by 3.4 per cent year on year in 2020, the worst-case scenario will see a decline of 9 per cent.
The best-case scenario: Decline of 3.4 per cent year on year in 2020
In the best-case scenario, even when the production levels are expected to revert to full capacity by April 2020, the PC market shipments are expected to decline 3.4 per cent year on year in 2020, with Q1 2020 down by 10 per cent and Q2 2020 by 9 per cent. Canalys believes that the biggest hit will be to sell-in shipments in the first two quarters, with the market recovering in Q3 and Q4.
Driven by production levels returning to normal and pent-up demand, on a yearly basis, Canalys expects the worldwide PC market will slowly begin its recovery starting in 2021. There will be small year-on-year growth in 2021, followed by a CAGR of 0.6 per cent between 2021 and 2024.
The worst-case scenario: Heavy decline of 9 per cent year on year in 2020
If the production levels do not revert to normal until as late as June 2020, sell-in shipments in the first three quarters will show a significant year-on-year decline compared with 2019. The worldwide PC market shipments are expected to decline year on year for three consecutive quarters, with a 21 per cent decline in Q1, a 23 per cent decline in Q2 and a 6 per cent decline in Q3. And is then expected to recover in Q4 2020 with 13 per cent growth in Q4 as the market stabilizes. Therefore, the worldwide PC market will suffer a heavy decline of 9 per cent year on year in 2020 when compared with 2019. The market is then expected to recover with 3 per cent growth in 2021 and a CAGR of 1.6 per cent between 2021 and 2024.
The data has been compiled from all the information available to Canalys from multiple sources, including but not limited to equipment vendors, ODMs, OEMs, supply chain companies, channel partners, retailers and ISVs. Closed for Chinese New Year, the shutdown was extended for two weeks due to the outbreak of Coronavirus. Even though factories have started opening up, industry sources suggest only 20 per cent of the workforce has resumed work due to various reasons.