Pandemic prompts IT spending cuts
The coronavirus pandemic has disrupted worldwide supply and demand for new PCs, bringing both bad and good news for computer recyclers and refurbishers, according to Gartner. The markets research firm reports that, during the first quarter, shipments of new PCs around the world declined by 12.3% year over year. It was the steepest drop seen since 2013, and it came after three consecutive quarters of growth. The data includes desktop and notebook PCs but not Chromebooks or iPads. A press release from Gartner pointed to a number of factors affecting the market:
- Chinese challenges: Because of the lockdown in China that started in late January, fewer new PCs were produced. Later, logistics challenges added to the difficulty of getting those devices to market.
- Demand for remote work and study: Once the lockdowns spread to other regions, there was suddenly PC demand for remote workers and online classrooms. Gartner noted manufacturers could not keep up with the demand. The effect has also been increased demand for refurbished PCs, (Inrego’s comments).
- Businesses slow IT spending: Gartner noted businesses are reducing their IT spending because of overall economic uncertainties, especially small and midsized companies. “This uncertainty is causing enterprises to shift their IT budgets away from PCs and toward strategic business continuity planning,” Mikako Kitagawa, research director at Gartner, stated in the press release. Kitagawa said organizations and consumers alike will extend their PC life cycles. That could delay those devices entering the recycling and reuse steam. Some ITAD companies are already struggling to access material because their customers’ offices are closed, or IT staff have put asset disposition on the back burner.
- U.S. trends: Because the virus impacts were most apparent in the U.S. late in the first quarter, PC shipments in the U.S. grew slightly (0.8%) year over year. But shipments fell by 30.2% from the previous quarter.