At the time of writing his market review, Boreham notes that school closures have been instigated in 34 countries, with intended closure periods ranging from short-term to mid-April and the Easter break to indefinitely.
The demande surge has been driven partly by an increase in demand from Education Ministries, school districts and schools in response to impending school closures and the need for students to have devices for distant learning, he notes, observing another factor, a drawdown of devices by the channel partners in a bid to ensure inventory ahead of calendar Q2, which is the traditional peak buying season. With concerns over possible shortages during this period, some OEM’s have tried to control the allocation of stock to maintain supply to large, mid-sized and small-scale channel partners alike. Therefore, high demand levels for Chromebooks and Windows devices has resulted in depleted stock levels for some of the OEM’s and their key distribution partners in some countries, Boreham writes.
Although several of the leading tier-one OEM’s entered 2020 with healthy inventory levels, bolstered by unsold stock from 2019, some OEM’s and distributors are running with depleted inventories, raising concerns over Q2 and whether OEM’s will be able to replenish stock levels to meet Q2 shipment commitments, both to existing projects and anticipated run-rate orders.