Dive Brief:
- PC shipments fell to an estimated 68 million units globally in Q3 2022, a decrease of 19.5% compared to the same period last year and the fourth consecutive quarterly drop, according to a Gartner report released Monday.
- In the U.S., the year-over-year drop was just 17.3%, led by a sharp decline in laptop sales but buoyed by a small uptick in desktop sales, the report said.
- Pandemic disruptions drove two years of strong growth in the PC market, but geopolitical instability, inflation and an economic slowdown have forced businesses to cut discretionary spending, pushing down global demand for laptops and desktop computers.
Dive Insight:
The humble PC, a trusted workhorse of office life, remains a perennial top line item in enterprise hardware budgets. Next year, laptops and desktops are projected to account for close to one-third of hardware spending, according to a recent Spiceworks Ziff Davis report.
That’s good news for Dell, HP and Apple, the top three manufacturers in the U.S. market. Lenovo commands the global market, with a 23.9% share, according to Gartner.
The big picture is far more ominous.
In January, Gartner, which has been tracking PC shipments since the mid-1990s, detected a shift. Total worldwide shipments reached nearly 340 million units in 2021 — their highest level since 2012 — and then fell by 5% in Q4 2021, according to Gartner.
The decline has continued as the economy slowed, and it isn’t likely to end soon, according to Mikako Kitagawa, director analyst at Gartner.
Some fall in shipments was expected on the heels of the two-year buying spree that helped support remote and hybrid work, Kitagawa said. But 19.5% is the steepest quarterly decline since Gartner’s tracking began.
The normal refresh cycle for desktops is five-to-six years; for laptops it tops out at four years. After purchasing PCs in high numbers during the pandemic, many companies have a window of two years before they have to start thinking about replacements.
Refresh cycles have some built-in flexibility.
“Really, for laptops, it’s until they break down,” Kitagawa said. In a strong economy, she said she’s seen companies replace business laptops on a two-year cycle.
Desktops are preferred by many companies because they are cheaper and they last longer, according to Peter Tsai, senior technology analyst at Spiceworks Ziff Davis.
“They don’t get bumped and dropped, and some businesses will use desktops for up to a decade,” Tsai said.
Kitagawa has her own theory about laptops. During the pandemic, people traveled less and so did their laptops. The reduction in wear and tear may have given companies leeway to hold off on replacements.
That’s good news for budget hawks. Less so for PC manufacturers.
