The pandemic boom is ending for PC and component manufacturers - The UpStream

Hero Image

The pandemic boom is ending for PC and component manufacturers

posted Sunday Jan 29, 2023 by Scott Ertz

In the early days of the pandemic in 2020, a number of industries got hit really hard, but in a good way. Their products and services were so in demand that their inventory completely dried up and the supply chain collapsed. Companies like Logitech saw their webcams in such high demand because of lockdowns that no one could get them. In fact, Avram had to do a roundup of the best alternatives to the Logitech c920, including building your own with a Raspberry Pi. Now, the companies that saw the big sales bumps are seeing a hangover of epic proportions.

Tech's sophomore slump

Now that the pandemic boom is over, people are returning to offices, and mostly the world has returned to normal, the companies that saw a big bump are now in a major slump. The most obvious brands to experience this slump are the PC manufacturers themselves, like HP and Dell. Companies around the world bought new laptops for employees that had previously worked in the office on desktops so that they could work from home. Now, those sales have ended and PC manufacturers are seeing historically low sales - not just a slump.

In addition to the PC companies, the peripheral companies are also seeing a major slide in sales. For example, Logitech announced its quarterly earnings this week, showing a 22 percent drop from the same quarter in 2021. The largest drop came in webcams, which were a big part of the pandemic boom. Logitech saw a drop of 49 percent year over year for webcams, followed by audio and wearables at 34 percent, and mobile speakers at 32 percent.

Why are peripherals hit harder?

Historical lows in PC sales are nothing in comparison to a 49 percent drop year over year in webcams. So, why is Logitech seeing these drops now while even the PC companies aren't seeing drops like that? Logitech President and CEO Bracken Darrell said in a statement about the quarterly results,

These quarterly results reflect the current challenging macroeconomic conditions, including currency exchange rates and inflation, as well as lower enterprise and consumer spending.

Yes, the macroeconomic conditions, translated as massive inflationary pressures, are going to have an effect on discretionary spending. However, that's not really the biggest influence here. Logitech saw its biggest decline in webcams, while mice only saw a 14 percent decline. This is because there is little to no real innovation or improvements happening in webcams. So, if you have a god webcam, there's not a lot of reason to replace it. That becomes even more true when employees are headed back into the office and spending less time on Teams and Zoom.

Comparatively, peripherals like mice and keyboards, which saw a significantly smaller drop, are devices that have a shorter lifespan than a webcam. They are touched and have components that wear out, requiring replacement. Similarly, PCs have a lifespan, either because of capabilities or because of lease agreements, which leads to more regular replacements than something like a webcam.

At this point, however, we can assume that the slump is likely to exist just in this fiscal year, and sales will return to flat for next year.


Login to CommentWhat You're Saying

Be the first to comment!

We're live now - Join us!



Forgot password? Recover here.
Not a member? Register now.
Blog Meets Brand Stats