Chromebooks are set to feel the pinch, as while these Chrome OS-powered portables are still selling well right now, PC manufacturers are purportedly planning to favor the production of Windows laptops which generate more profit going forward as the global component shortage remains a serious problem.
This comes from IDC (as highlighted by The Register (opens in new tab)), with a fresh breakdown of Q2 2021 sales in which the analyst firm observed: “For Chromebooks, while still in high demand and even on backlog for many education deals, vendors have started prioritizing higher margin Windows laptops given the on-going component shortages.”
As mentioned, Chromebook sales are still strong for the second quarter, with shipments up 68% compared to the same time last year, hitting 12.3 million units. That is, however, down slightly from the record-breaking previous two quarters.
Lenovo, which is the top dog PC manufacturer, observed that if it wasn’t for issues around component shortages, the company could have shipped between 30-40% more devices last fall, with supply difficulties particularly impacting memory and display components.
Analysis: How much shine to be taken off Chromebooks?
It’s no surprise that manufacturers would want to prioritize the laptops which are making the most profit – making money is what these companies must do, after all. Exactly the same thing happens elsewhere in the hardware world when demand outstrips supply. For example, with limited production capacity, Intel will make more of its premium high-end processors, as these bring in far more money than the thinner margins at the budget (or even midrange) sectors. We’ve seen exactly this happen with Intel in the past, and indeed again in the current climate.
So, this is just simple business mechanics at work. If these PC vendors had their way, they’d be making a ton of both Chromebooks and Windows PCs – but right now with component shortages being the way they are, something has to give, and that something is thin-margin Chromebooks, at least if this report is on the money.
Going back to Intel, according to the chip giant, this global shortage of components is likely to persist at least until next year, or maybe we might have to wait until 2023 for a full recovery to catch up with demand. Also, the CEO at HP previously said that supply problems will carry on creating havoc for ‘at least’ the remainder of this year, so quite possibly longer.
It’s probably an overreaction to say that if you want a Chromebook, maybe you should grab one now, but if this is indeed the general direction the industry is heading, and IDC is on the money here, it might not hurt to consider not leaving a potential purchase for too long. Particularly given that Windows 11 is about to arrive, with a drive to push even more Microsoft-powered notebooks into the hands of punters, and if Chromebooks really do start to struggle with an even more skewed supply/demand ratio, pricing could end up creeping upwards.
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