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Coronavirus Concerns Sink PC, Smartphone Shipment Forecasts

Fears over the coronavirus and its effect on global supply chains will result in a leaner-than-expected year for the PC and smartphone markets, according to IDC.

The Framingham, Mass.-based research firm slashed forecasts last week for both PC shipments and smartphones. It now projects a 9 percent decline for the PC market in 2020, with total shipments reaching 374.2 million for the full year.

The big drops in shipments are expected in the first half of the year, with a decline of a little over 8 percent in Q1 and nearly 13 percent in Q2.

"We have already forgone nearly a month of production given the two-week extension to the Lunar New Year break and we expect the road to recovery for China's supply chain to be long with a slow trickle of labor back to factories in impacted provinces until May when the weather improves," said Linn Huang, an IDC research vice president, in a statement. "Many critical components such as panels, touch sensors, and printed circuit boards come out of these impacted regions, which will cause a supply crunch heading into Q2."

IDC's definition for PCs includes desktops, notebooks, workstations and tablets. Before the coronavirus appeared, IDC was already expecting a difficult year for PCs due to difficult comparisons against last year, when the Windows 7 replacement cycle boosted PC sales.

Also last week, IDC released revised forecasts for smartphone shipments in 2020. The firm had previously expected a better year for smartphones. Now, however, the supply chain issues along with potential drops in demand in the world's largest smartphone market of China due to prevalence of the coronavirus there are causing IDC to anticipate a decline of more than 2 percent in 2020. Shipment volumes are expected to reach around 1.3 billion units for the full year.

While IDC expects the PC market to work its way slowly out this slump, the firm is more bullish on the smartphone market, which should benefit from a 5G tailwind in 2021.

Posted by Scott Bekker on March 02, 2020


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