Why the Laptop You Want Could Be Sold Out All Year
The pandemic-driven demand for more compute and graphics performance shows no signs of slowing down. It has been widely reported that the graphics card and CPU inventory is under severe strain due to the lack of critical components, and we are now seeing that the demand for notebooks and desktops is also increasing as more people are forced to work, learn and stay entertained at home.
And while Lenovo is experiencing a new renaissance due to the demand for laptops and tablets – the company is best known for IdeaPad, Yoga, Legion, and ThinkPad branded laptops – customers may find it difficult to find a notebook they want to buy if the demand continues to rise.
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Typically, Lenovo and its distributors hold around six weeks’ worth of inventory at any one time, but demand during the pandemic caused shipments of its laptops to plummet to very low levels.
Gianfranco Lanci, Lenovo’s chief operating officer, said in an earnings report from The Register that “we’ve been at very, very low levels and it’s still more or less at that level,” saying we haven’t seen any decline in demand since the winter quarter “.
“I think when I look around the world … from the US to Europe to China to the Asia-Pacific region, our channel inventory has never been this low, and in some cases we were down to two to three weeks last quarter. ” he said.
Lack of components
Mark Coppock / Digital Trends
According to a report by Canalys, Lenovo ranked first in 2020 in terms of shipping volume and market share. With 87 million computers shipped, the ThinkPad manufacturer accounted for 19% of the market, ahead of competitors like Apple, HP, Dell and Samsung. The company predicts PC demand won’t rise until 2021, and Lanci expects 300 million computers to ship this year.
Lenovo is not the only PC manufacturer that has been hit by a surge in demand while suffering from component shortages. Rival HP, which owns brands like Omen, Envy, and Specter, found a lack of integrated circuits and panels, which slowed manufacturing. And the lack of high-end chips from Intel, Nvidia, and AMD is also accelerating the shortage on the supply side.
To address the component shortage, Intel created a promotional video ahead of CES this year highlighting how the pandemic has been used to turn abandoned offices into manufacturing laboratories to increase CPU supplies and improve yields . AMD and Nvidia both assume that the supply of GPUs will not normalize in the first half of the year.
More electricity is needed at home
The situation could potentially worsen. As more people spend time on their devices, they are likely to find that they need more power and that this could result in faster replacement cycles in the future, said Yang Yuanqing, CEO of Lenovo. This means that the surge in demand is likely to continue for some time.
That feeling was borne out by Matt Baker, senior vice president of strategy and planning at Dell EMC, who claimed in an interview with Seeking Alpha that people are forced to turn on older home PCs that they normally wouldn’t need because when they at work, they will soon find these devices need updating.
While consumers see this as bad news – overcrowded warehouse discounts may no longer be as great, and it may also be more difficult to find a PC you want in stock – manufacturers are seeing more profits. Lenovo announced that its PC and Smart Device business grew 27%. And with the tariffs for premium PC components, buyers should expect the price of a PC to rise this year.