Dell and HP optimistic about demand for laptops after restrictions are eased

Dell Technologies Inc. and HP Inc. reported hefty profits due to a resurgent personal computer demand. They are projecting the demand to continue even as people return to offices and schools when the lockdowns caused by the coronavirus pandemic are dying down.

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Dell and HP, two of the world’s top three PC makers, released reports about sales and profit in the three months ending in January, the results topped analysts’ estimates. The overall market grew for the first time in 2020 for a decade, and according to HP CEO Enrique Lores, the market will expand again this year, helped by demand for laptops staying high due to a few reasons.

One of the reasons stated by Lores is that PC makers believe the demand for notebooks from consumers that snapped them up to enable study and work from home during the lockdown won’t evaporate as restrictions caused by the pandemic ease. With large chunks of the world’s population facing the months-long lockdown, the use of computers has increased in everything from personal communication to learning and gaming, they argue.

“We think that change is sustainable,” Lores said in an interview. “Covid has made technology more fundamental in all of our lives.”

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According to a report by Bloomberg, “HP executives moderated that optimism by predicting that consumer demand will subside as more people return to the kind of lives they led before the lockdowns caused by the Covid-19 virus. As that happens, companies and other organizations will return to spending on their in-house hardware.”

Jeff Clarke, Dell COO, told analysts the hardware maker sees an improving demand environment in 2021. Millions of school children, who are accustomed to working on the device, still need laptops, and companies will be reopening offices equipped with old PCs and will need to spend on replacements, he said.

“The PC is the hub of the new economic model,” Clarke said.

Dell has informed about shortages of some types of chips such as those that power memory card readers and displays. Something that is also keeping a lid on growth is the supply constraints of some components. HP expects that situation to continue until Q3 2021. Still, its view of PC demand in 2021 is much higher than before the pandemic, Lores said, and suppliers haven’t been able to keep up with the surge.

Round Rock, Texas-based Dell, said sales rose 9% to $26.1 billion in the period that ended January 29. According to data compiled by Bloomberg, that compares with an average analyst estimate of $24.5 billion. Palo Alto, California-based HP, reported $15.6 billion, more than $600 million higher than the average estimate.

“Dell’s fiscal fourth-quarter revenue from consumer PCs jumped 19%, and HP’s climbed 34%. PC sales to business and government agencies for Dell rose 16% to $9.9 billion. Commercial sales at HP contracted.”

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