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PC Makers Banking on a New Normal


The pandemic-driven boom for the personal-computer business is over. The big question now is where the market settles.

Global PC sales averaged around 265 million units annually in the five-year period before the pandemic’s onset in 2020, according to IDC. That number jumped to 302.6 million units in 2020, as the pandemic sent workers and companies rushing to gear up for working at home. The rush continued well into this year, which IDC expects to end with more than 340 million PC units shipped.

That would be the best year for the industry since 2012, but it also reflects a notable slowdown already under way. Third-quarter PC sales grew less than 4% year over year following five straight periods of double-digit gains, according to IDC’s data. And the firm’s full-year projection suggests a 4% decline in the fourth quarter is likely. Both IDC and rival

Gartner

point to supply issues caused by the chip production shortage as constraining some sales, though both also concede demand has slowed in some segments. Gartner says laptop and Chromebook shipments in the U.S. fell 10% year over year in the third quarter.

The key question now is whether PC sales in general fall to their pre-pandemic norm or stabilize at a new, higher level. A case for the latter is persuasive. The adoption of long-term, hybrid work arrangements that allow employees to bounce between the office and home frequently means a higher number of workers will need more than one computer. It also could mean a larger market for peripherals such as webcams and speakers as the long-term reality of frequent Zoom calls sinks in.

HP


HPQ 0.04%

and Dell are banking on it. At its Sept. 23 analyst meeting, Dell projected average annual growth of 2%-3% for its PC segment over the next five years, with Client Solutions segment President

Sam Burd

claiming that the “PC industry has reset to a higher level.” HP seems likely to tout a similar message at its own analyst meeting next week; Chief Financial Officer Marie Myers told a Citi conference last month that the company has great confidence in the outlook for its PC business, noting that the addressable market has “really expanded.”

Most industry analysts seem to agree. Both IDC and Gartner project PC shipments of greater than 340 million units in 2022, and IDC sees that persisting through 2025. TrendForce, which projects a 7% decline in laptop unit sales in 2022, added in its updated forecast issued Tuesday that the laptop market “will undergo some growth in the medium to long term, without falling back down to pre-pandemic levels.”

At least working from home is clicking for some.

Write to Dan Gallagher at dan.gallagher@wsj.com

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