Store Shelves Stripped of Laptops as Coronavirus Increases Working From Home
Equipment makers were already grappling with supply-chain bottlenecks before demand in U.S. spiked
published : 20 Mar 2020 at 04:00
newspaper section: Business
writer: Sarah E. Needleman & Aaron Tilley
Brad Sutton, a pastor and commercial photographer, went shopping for a new laptop Friday after the one he owned died. The model he was looking for was sold out. His backup was also gone, as was a third option recommended by a store employee.
"It was a little frustrating," he said after his outing to an electronics store in the Dallas area. Stores' stocks of toilet paper, he said, are the only thing he has seen more depleted by the Covid-19 outbreak.
The unprecedented surge in people working from home because of the coronavirus pandemic has caused a spike in demand for laptops and computer notebooks--at a time when personal-computer makers have been struggling with disruptions to their supply chains and shortages of a key component. The upshot: Some U.S. computer shoppers are finding retailers with empty shelves.
Mr. Sutton, who needs a device to write sermons and edit photos, settled for a refurbished machine. The only upside, he says: He spent about $200 to $300 less than he planned.
Demand for laptops in the U.S. is expected to continue to rise as more businesses adopt and require work-from-home flexibility, said Paul Bay, president of global technology solutions for Ingram Micro Inc., an Irvine, Calif., distributor of information-technology products. The same goes for mobile devices and computing accessories such as docking stations, cameras and displays, he said.
The shopping spree comes as manufacturers are recovering from the earliest effects of the coronavirus outbreak in China, which disrupted production for some equipment makers and their components suppliers in a country that is central to the global electronics supply chain.
HP Inc., one of the world's largest PC makers, said its "factories are steadily coming online." The company previously warned that those disruptions would weigh on this quarter's earnings. HP wouldn't address its immediate ability to handle retailers' short-term supply needs but said it was "keeping a pulse on customers and partners to ensure their needs and delivery requirements are supported."
Dell Technologies Inc. also is looking for alternative supply sources to deal with bottlenecks, and has experienced increased orders resulting from working from home, said a person close to the company. And Lenovo Group Ltd. said it had seen an uptick in requests for equipment packages to ease working from home, such as a laptop bundled with a headset and a separate monitor. Even so, a spokeswoman said Lenovo's operations in the U.S. aren't experiencing a shortage of laptops.
Apple Inc. on Tuesday said it would keep its world-wide stores closed until further notice. It previously said they could reopen as soon as March 27. The company also on Wednesday unveiled an upgraded MacBook Air laptop and updated iPad Pro tablet.
Even before the coronavirus hit, PC makers were grappling with supply headaches. Chip maker Intel Corp. for more than a year has been struggling to produce enough microprocessors for customers. The company said it was boosting production to alleviate the bottleneck. Device makers also are coming off a period of high demand in recent months as customers upgraded machines to those running a newer version of Microsoft's Windows operating system before the software giant this month stopped supporting the older Windows 7.
The supply hitches mean that the current surge in demand for laptops may well not translate into a boon for PC makers. Before the work-from-home boom in the U.S., Microsoft last month lowered its expectation for sales in the current quarter for the unit making its Surface tablets. It didn't give a revised outlook.
And International Data Corp. last month estimated that PC shipments, including laptops and tablets, will fall 9% this year. In November it had already projected a 6.8% retreat for 2020. The remote-work buying spree is unlikely to change that forecast, according to IDC, since much of the current buying will be of existing inventory.
Meanwhile, retailers can't get stock quickly enough.
Matt Canon, a part-time Best Buy salesman in Chicago, said laptops, keyboards and video cables are nearly sold out, while computer monitors and small TVs are completely gone. "It hasn't been like Black Friday but more than an average day," Mr. Canon said in terms of foot traffic and sales.
The store's bare shelves and an incident in which a shopper was caught pumping the store's hand sanitizer into a personal container have him feeling anxious.
"We are seeing a surge in demand across the country for products that allow people to work or learn from home as well those products that allow people to refrigerate or freeze food," a Best Buy spokesman said. The company declined to say whether it is having any difficulty restocking computers.
Sales of computers and mobile phones are now more than double what they were a year ago on HUBX, said Derek Wall, chief executive of the online marketplace, where anonymous hardware distributors sell excess inventory to electronic retailers. "Business has gone through the roof."