Let’s kick off our week with some review of the current state of play.
Reuters is reporting that the semiconductor shortage could last well into 2022, and that smartphone production may be next to be impacted. Intel revealed a timeline in their earnings call, expecting shortages to bottom out in the second half of this year, and one to two years to catch up with the demand. Of course, the company also reported record revenues for the quarter ending June 30, with its PC business sales up 33 percent year over year..
How about business travel – the airlines are reporting that while it’s recovering, the levels are half of what they were in 2019. They anticipate the reopening dates of September and October as key. Of note – sales and consulting travel is up. Fares are similar to pre-pandemic levels, and there will be a four to six week lag between business travel and reopenings. And, it’s unknown how hybrid work will impact travel.
Here’s one trend to track too – nearly one quarter of Americans have had a virtual doctor appointment in the last month. That’s down 1 percentage point since the question was started in April. Other stat – it’s 21% of doctors’ visits in April 2021, compared with 69% of visits in April 2020. One reason – patients are returning for care that was pushed off because of the pandemic, per earnings reports from hospital operators.
And the larger context here – the ongoing pandemic. The daily average of confirmed cases in the US has about quadrupled during July, and new projections say this will accelerate through the summer and fall, with a peak in mid-October, attributed to thew more aggressive Delta variant.
Why do we care?
I’ll do more world of work tomorrow too, but the COVID context matters to start with. This is going to change the state of the market over the rest of the year. It’s not over yet, folks.
The market is not what it was, and it won’t be what it was. The chip shortage is going to be a constant, and as that drives a lot of technology spending, my recommendation is to be working with customers earlier on their plans. It’s going to take a lot longer to get new gear that you might expect.
The data in virtual doctors visits parallels a lot of work experiences. Telemedicine is a thing, and it’s not taking over and it’s not disappearing. Behavior will settle in differently… and just like the chip shortage, a “catch up” period for businesses is to be expected. Savvy operators will find their own customers backlog, and expect that what’s happening now isn’t a final state.
Layer in the pandemic, and you have a dynamic, unstable market.