PC demand keeps falling as enterprises defer new orders

Dive Brief:

Demand for PCs fell 29% year-over-year in Q1 2023, according to IDC data. Global shipments of desktops, notebooks and workstations reached 56.9 million in Q1, down from 80.2 million in Q1 2022, the market research firm found.
The top three PC companies by market share — Lenovo, HP Inc. and Dell Technologies — each saw shipments decline by nearly one-quarter or more. Apple’s shipments fell by more than 40%.
While enterprise IT budgets remain robust, a worsening macroeconomic climate coupled with weak demand and excess inventory will continue to depress shipments through the end of the year, the report said.

Dive Insight:

A pandemic-driven surge in demand for laptops and workstations subsided last year, as business leaders braced for potential recession amidst persistent inflation, rising interest rates and low levels of unemployment.

But the market has taken a major hit and is now struggling to regain its pre-COVID-19 footing, according to IDC. Quarterly shipments during the first three months of the year were noticeably lower than the 59.2 million units shipped during the same period in 2019 and 60.6 million units in Q1 2018.

Analyst firm Gartner now projects IT spend to total $4.6 trillion in 2023, a year-over-year increase of 5.5%. However, the device segment, which includes PCs and laptops, is projected to contract by nearly 5% this year.

IDC doesn’t expect the market to rebound fully until 2024, when many aging devices will be due for a refresh. However, if recession concerns spill over into next year, recovery might be slow, the report said.

“If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11,” Linn Huang, research VP of devices and displays at IDC, said in the report.

In addition, PC sales may be buoyed by manufacturers moving to step up Chromebook orders, the report said.

“The industry expects Google to increase its licensing fees in Q3 2023 so companies are trying to build up inventory before that happens,” Ryan Reith, program VP of worldwide mobile device trackers at IDC, told CIO Dive in an email.

Lenovo, HP Inc., Dell Technologies and Apple now control more than two-thirds of the global PC market, according to IDC.