Laptop availability powers down as work-from-home demand rises, imports fall — Panjiva
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Laptop availability powers down as work-from-home demand rises, imports fall

Info Tech - Tech Hardware 528 Natural Disasters 171 U.S. 4088

Companies enacting work at home policies to comply with government requests and “social distancing” guidelines have contributed to a shortage of laptop computers, the Wall Street Journal reports. 

A recent flash survey by 451 Research (paywall), a subsidiary of S&P Market Intelligence, covering March 10 through March 19 noted that 84% of companies that have spending more on mobile devices and laptops are also implementing extended work-from-home policies.

The 451 Research Flash Survey also shows that larger firms are more measured about supply disruption, but spending more on parts and materials, likely including laptops. Small companies had more extreme views about the risks associated with COVID-19 and force majeure.

When asked whether “my vendors and suppliers are likely to invoke force majeure“, 30.3% of small firms responded strongly to the question while only 22.3% of large companies responded strongly. This may be due to small companies having smaller supplier bases, and therefore a better handle on the status of those vendors.

Large companies have instead been spending their way through the crisis, with 20.0% of large corporations replying that their costs for parts and materials had increased versus 7.6% of smaller companies. Larger companies may be able to absorb higher costs than small firms, potentially explaining the disparity.

COMPANIES SPENDING IN EARLY DAYS OF CRISIS

Chart segments responses by business size for selected questions. Source: 451 Research’s Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey March 2020

An anecdotal search by Panjiva of large corporate suppliers of IT hardware, CDW and SHI, show a potential shortage in supply as well. A CDW search as of Mar 24 for Dell, Lenovo, and HP laptops – the three brands used by most businesses – show only 0.5% of models as “ready to ship”. Similarly, a search on SHI for the same manufacturers show 0.0% as “in stock”.

LAPTOP AVAILABILITY PROVING SCARCE

Images shows result of search for selected laptop computer brands and models on March 24, 2020. Source: Panjiva analysis of CDW and SHI websites

Panjiva data shows that laptop imports have decreased by 4.1% year over year in the three months to Jan 31 – laptops also had slightly fallen in the last two quarters of 2019 after a surge in the third quarter. This may be a response to expected tensions in the U.S. China trade war, and may have set up recent low supplies.

In the short term, Panjiva’s shipping data shows that the virus hitting Aisa may have amplified the current laptop supply crunch – imports of laptops fell 71.2% year over year in February and 50.9% in the first three weeks of March. Other computers have fallen as well, down 39.4% year over year in February and 35.4% in the first three weeks of March.

U.S. IMPORTS OF COMPUTERS BUG OUT

Chart segments imports of laptops and other computers on a monthly and three month basis. Source: Panjiva

Seaborne imports linked to business laptop manufacturers HP, Lenovo, and Dell have all shown declines, although it is important to note that all of these firms use made to order manufacturing, airshipments, and dropshipping as a supply chain force multiplier. Air freight has been spiking as companies try to regroup, as noted in Panjiva’s research of Mar 17.

Shipments associated with HP have fallen 66.0% year over year in the three months to Feb 29 – the depths of the crisis in Asia. Lenovo and Dell saw lighter reductions, 42.5% year over year and 49.0% year over year respectively over the same period, likely contributing to the shortage.

LAPTOP MAKERS SEABORNE SHIPMENTS LAG 

Chart segments imports of computers associated with HP, Lenovo, and Dell, on a monthly and three month average basis. Source: Panjiva

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