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PC Sales Continue Surging -- And That's Good News for Intel, AMD and Others

Notebook and gaming PC sales continue growing rapidly, in spite of ongoing component shortages.

PC sales remain on the upswing thanks to purchases made to support remote workers and learners. And it looks as if there’s still a lot of pent-up demand going into the holiday season.

Research firm IDC estimates PC shipments rose 14.6% annually in Q3 to 81.3 million. That compares with 11.2% shipment growth in Q2, and just 2.7% growth in 2019.

Officially, Gartner estimates PC shipments rose just 3.6% to 71.4 million. However, when including Chromebook sales (counted in IDC’s official estimate), Gartner’s estimate for shipment growth rises to 9%.

Along with Chromebooks, Q3 was a strong quarter for gaming PCs and (in certain cases) notebooks with cellular modems, according to IDC. On the flip side, desktop demand was said to be weak in the U.S. and EMEA. Desktop PC sales depend heavily on purchases made to support corporate offices, many of which are of course empty right now.

Demand for gaming products has been strong pretty much across the board in recent months: In September, supplies of graphics cards based on Nvidia’s  (NVDA) - Get NVIDIA Corporation Report new GeForce RTX 3080 and 3090 gaming GPUs quickly sold out at major retailers, and Sony  (SNE) - Get SONY GROUP CORPORATION SPONSORED ADR Report and Microsoft  (MSFT) - Get Microsoft Corporation (MSFT) Report both saw strong pre-orders for their next-gen consoles.

Between them, top-3 PC OEMs Lenovo, HP  (HPQ) - Get HP Inc. (HPQ) Report and Dell Technologies  (DELL) - Get Dell Technologies Inc Class C Report accounted for 61.5% of Q3 shipments, per IDC. Lenovo and HP’s shipments were each estimated to be up more than 11%, while Dell’s shipments, which skew heavily towards corporate buyers, were estimated to have dropped slightly.

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Apple  (AAPL) - Get Apple Inc. (AAPL) Report, whose Mac revenue rose 22% annually during its June quarter, was estimated to have an 8.5% unit share, with shipments rising 39% to 6.9 million. Given the Mac line's high average selling price (ASP), Apple's revenue share may have been above 20%.

The global PC strength reported by IDC and Gartner fits with what research firm NPD has reported about U.S. PC demand. In September, NPD estimated that U.S. retail PC sales were up 42% annually from March to August, with Windows notebook sales up over 40% and Chromebook sales up over 60%.

NPD also reported PC ASPs have been rising, with Chromebook ASPs topping $300 and Windows notebook ASPs “regularly exceeding $575.”

Notably, this growth has occurred in spite of ongoing component shortages. IDC notes processors, display panels and other PC components were in short supply in Q3, and suggests the situation isn’t likely to improve in Q4. As a result, it expects a backlog of unaddressed PC demand to remain into 2021.

Meanwhile, NPD said last month that its U.S. surveys indicate “a consistent 15% of consumers have reported that they intend to buy a notebook in the next month, with more than half of all buyers noting they were buying a ‘new’ additional notebook for their home as opposed to replacing an existing one.”

All of this suggests that PC sales, which were in a gradual decline during much of the last decade, will grow strongly again in Q4. And that naturally would be a positive not just for PC OEMs, but also Microsoft, Intel  (INTC) - Get Intel Corporation (INTC) Report, AMD  (AMD) - Get Advanced Micro Devices, Inc. Report, Nvidia, Micron  (MU) - Get Micron Technology, Inc. (MU) Report, Logitech  (LOGI) - Get Logitech International S.A. Report and a slew of other suppliers.