What will drive PC demand in 2021?
Canalys outlines where the opportunity lies for the channel next year in a 'booming' market
The significant demand seen in the PC market this year is expected to continue throughout the early months of next year, according to a new report from Canalys.
The unprecedented drive for devices as a result of the COVID-19 pandemic has led to the PC market having its "strongest period of growth ever" with shipments expected to increase over 17 per cent year-on-year to 458 million units in 2020.
This will spill over into next year with shipments in the first quarter expected to be up 43 per cent, however, this will fall steadily as 2021 continues, Canalys predicted, adding that Western Europe, alongside the US, will be a strong contributor to the "immense" growth of the market in Q4 of 2020 and H1 of next year.
The analyst firm highlighted the key growth trends for next year in its PC market outlook report: remote working, remote learning, device-as-a-service (DaaS) and emerging opportunities.
"While the global pandemic has provided a huge short-term demand boost, the PC industry has plenty more to look forward to in the years ahead. At Canalys, we identified four key trends that will drive PC market growth in 2021 and beyond: remote working, digital learning, device as a service and emerging use cases," said Rushabh Doshi, research director at Canalys.
"As vaccines start to roll out and we enter a post-COVID world, behavioural changes among both businesses and consumers will place greater emphasis on PC use, leading to a host of new opportunities not just in hardware, but also in software and services. Meanwhile, the larger installed base driven by more use cases and broader demographics will provide a host of new opportunities.
"Security and connectivity will be key focuses in a post-COVID world, where businesses formalise their remote- and flexible-working policies for employees. PCs with stronger security standards will be integral to future solutions and will be expected from vendors and channel partners, especially in industries such as financial services and the public sector.
"The pandemic has also revealed just how important secure and reliable connectivity is in the face of disruption. As travel, commuting, on-site work and emerging market demand for broadband alternatives increase, LTE and 5G connected PCs will see their popularity grow."
Canalys believes that several of the major drivers behind the PC market growth in 2020 are caused by fundamental, long-term changes in how consumers and businesses are evaluating their computing needs.
Remote working and learning
Home working and learning requirements will also accelerate PC refreshes as users will need better cameras, displays and audio from their devices and vendors are taking this opportunity to push new devices that cater to the new hybrid working and learning models, Canalys noted.
Refreshment cycles were the main driver of for the PC market prior to 2020, but the pandemic has resulted in a boom in new sales from the commercial, education and government sectors, which has led the market watcher to update its prediction that sustained installed base would hit 1.2 billion desktops and notebooks in 2021.
This boom will lead to PCs being upgraded faster due to a "healthier mix" of notebooks versus desktops and an expected increase in incidents while working remotely in uncontrolled environments, according to the report.
DaaS
The analyst house anticipates a surge in demand for DaaS as businesses continue to reconsider their digital infrastructure as it offers a low capex and ensures that operating expenses are predictable. It also provides the customer with reduced IT overheads, after-sales service and product disposal.
"The idea of getting PCs on subscription is not new, with most PC vendors having DaaS offerings for a few years now. The channel adopted this concept much earlier, bundling services and infrastructure together and offering clients easy financing," the report stated.
Canalys believes that the strongest opportunities around DaaS will come from education and large enterprises. The latter category, in particular, is moving towards a DaaS model primarily because of the predictability and simplicity it offers for IT infrastructure and cost management in these ongoing uncertain times.
"Large enterprises are also likely to move faster to DaaS after a pilot roll-out, which means channel partners and vendors need only prove the benefits of DaaS over the upfront purchase of PCs," the analyst house noted.
Security as an emerging trend
The increase in remote and flexible workers as a result of the pandemic will result in a "renewed emphasis" on cybersecurity as customers now have time to set up formalised remote-working arrangements, according to Canalys.
The analyst forecasts that global expenditure on cybersecurity will increase by nine per cent in 2021 and seven per cent in 2022.
" Equipping employees with PCs that meet higher minimum standards for security will be a core part of the solutions that vendors and the channel will be asked to deliver in coming years," it stated.
"Security features, such as Windows 10 Pro out of the box, secure OS load and biometric authentication and will be seen as increasingly important for companies as they design new hybrid workforce policies."
Despite its bullish outlook, the market watcher warned vendors that these predictions will not become a reality unless they focus on the issues hampering the industry.
It urged PC manufacturers to diversify their supply chains, build products for this new style of working, implement go-to-market models that encourage quicker refreshes, increase their focus on DaaS through the channel and innovate in the budget device segment in order to seize these opportunities.