Total Addressable PC Market 40% Larger Than Pre-Pandemic: HP
COVID-19 as an “accelerant” of hybrid work and remote learning was no “cyclical, one-time” trend, HP President-Personal Systems Alex Cho told a UBS investor conference virtually Wednesday. The shift was “structural,” he said. Even when people begin to travel more…
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for business, work “will continue to be more hybrid,” he said. “That is a structural change that will require ongoing technology enablement to support.” People are reducing their “travel spend,” and assuming that technology “has to be the replacement to enable that reduction,” he said, virtually all companies are looking at “how to equip their employees now that they are going to be working more at home,” and three-quarters are “actively investing in improving their home setups.” he said. “While penetration rates have been increasing, there's still room for growth, and we see that all as good news for this ecosystem that we are participating in.” The total addressable market for PC-reliant categories is “structurally larger” than pre-pandemic, and it will “continue to grow,” said Cho. “As we look forward, the market is going to be $560 billion. That's a 40% increase versus pre-pandemic expectations.” HP expects supply constraints to continue “at least through the second half” of calendar 2022, he said. “We are an environment where demand is larger than supply.” HP estimates it has “about a quarter’s worth” of order backlog, he said. “We do expect it to go down over time as we find ourselves in a more favorable supply environment and our ability to execute in that space continues to improve.” Everyone in the PC business is monitoring “refresh cycles” very closely as a stimulant for growth, he said. A PC’s audio and video quality is “one of the top drivers” for faster refresh rates, “and that will continue to be the case,” he said. Another driver is the “continued shift” to notebook PCs from desktops, he said. “The refresh cycles of notebooks are faster than desktops.”