Apple the top pick in growing PC market, analyst says

Credit: Andrew O'Hara, AppleInsider

In a note to investors seen by AppleInsider, lead analyst Krish Sankar updated his PC unit forecasts to grow another 2% year-over-year in 2021. That's on top of the previous unit growth in 2020 of about 8.3%.

PC shipments grew an estimated 9% in the fourth quarter of 2020. Sankar said he expects that momentum to continue into 2021, with shipment growth of about 2.5% during the year. The key beneficiaries will be Apple, Silicon Motion Technology Co., and Western Digital, Sankar wrote.

That forecast is consistent with Cowen supply chain checks that indicate notebook PC builds are already growing in the low single digits in early 2021. Server shipments are also expected to continue growing into 2021, with an acceleration of growth of up to 5% on the table.

In the IT hardware space, Apple remains Sankar's top pick because of the growth and recent iPad and M1-equipped Mac releases. The switch to Apple Silicon, the analyst added, is likely to alleviate some CPU procurement issues.

For other PC makers, like Dell and HP, a recovery in the enterprise market is going to be critical to revenue growth. An end to the current work-from-home environment will likely lead to a recovery in demand for servers, storage systems, and printing devices, Sankar said.

There are some potential risks to the PC market, the analyst notes. That could be a confusion as to whether an uptick in gaming PCs during the holiday season was caused by strong gaming computer demand or an increase in the number of users looking to mine cryptocurrency.

Similarly, commodity costs could be a potential source of cost inflation for the PC market in the second quarter of 2021. Supply of key components, like memory configurations, could become constrained by a rise in demand. Server market memory transitions and 5G smartphone shipments could also tighten supply.