Dell Technologies and HP Inc. are two major players in the world of personal computing. These companies are pioneers of PC supply and as we all are aware of the global chip shortages; it is no surprise that it will impact the sales and revenue of these companies as well.
Recently, both of these companies announced their quarterly revenue that successfully beat the Wall Street estimates on Thursday, as reported by Reuters. The main catalyst in improved sales during the pandemic for Dell and HP including other PC manufacturing companies is the customer’s need for personal computers to cope up with the work from home culture and online everything.
As customers continued to buy PCs even during the pandemic, the revenue of the industry had to rise but unfortunately, because of the ongoing global chip shortage, the coming months can be rough for PC manufacturers.
Dell and HP recently announced that the ongoing global chip shortages could impact their ability to meet the demand for laptops and Personal Computers this year. This statement has led to a 6% drop in share value for HP and 1% for Dell.
Market analysts could predict this move months back but now as these companies have officially announced that they will not be able to manufacture PCs without chips and there could be constraints in the coming months of the year, their shares drop in the market.
Having said that, people’s demand for PCs will not end anytime soon because the pandemic has led to everything online and remote. Be it schooling, office work, business meetings or anything, people need a Personal Computer to carry out their tasks efficiently and thus, the demand will not end anytime soon.
Thomas Sweet, Chief Financial Officer at Dell says that the component supply situation remains constrained and as limited as these chips are getting, the costlier they are sold. He further added that if the companies went ahead to procure these chips at higher market value, it would directly hit the company’s operating income in the current financial year and this could lead to slightly lower revenues on a sequential basis, according to a report by Reuters.
According to the data collected by IDC, the global shipment of PCs including desktops and Laptops saw an increase of 55.2% during the first quarter of the year.
The data by IDC also revealed that HP stands in the second position among global PC vendors and this shortage of chips would impact the manufacturing and sales of PCs and printers for the coming quarter.