PC Shipments Decline 30 Percent, Gartner Finds

Analyst house Gartner has confirmed other reports of the decline in PC shipments worldwide, in more bad news for PC manufacturers.

Gartner said that its preliminary results have indicated that worldwide PC shipments totalled 55.2 million units in the first quarter of 2023. This is a 30 percent decrease from the first quarter of 2022.

Last week Gartner had forecast a rise in IT spending in 2023 despite the ongoing economic uncertainty, with worldwide IT spending projected to total $4.6 trillion in 2023 – an increase of 5.5 percent from 2022.

Shipment decline

Gartner however said the second consecutive quarter of historic year-over-year PC shipment decline is due to an unfavourable combination of oversupply and continued low PC demand due to economic uncertainties and a lack of purchase motivation.

“PC pricing pressures intensified during the quarter as vendors offered considerable discounts to clear inventory,” said Mikako Kitagawa, Director Analyst at Gartner. “To drive demand, vendors temporarily reduced average selling prices (ASPs) of PCs already in the channels, but ASPs of new PCs shipping into the channels remained elevated due to inflation-driven supply chain cost increases.”

“Essentially, PC vendors pursued a strategy to protect margins rather than to pursue market share by lowering prices,” added Kitagawa. “ASPs will increase moderately in 2023 as vendors pass the cost increases for new PCs entering the channel to end users.”

Gartner also provided its assessment of the top PC manufacturers, which remained unchanged in the first quarter of 2023, with Lenovo maintaining the number one spot in shipments with 23.3 percent market share.

Second place is HP with 21.8 percent share; third is Dell with 17.3 percent; fourth is Apple with a 8.7 percent share; fifth is ASUS with 7.1 percent; and sixth is Acer with 6.4 percent.

Apple experienced the biggest shipment decline (other than Acer), as Mac sales declined 34 .2 percent in Q1, compared to an approximate 30 percent decline by other PC manufacturers.

That said, Gartner said that Lenovo had recorded the steepest annual shipment decline in its corporate history over two quarters. While the US was a particularly challenging market for Lenovo, the company had modest growth in Japan driven by end of fiscal year PC purchases.

Gartner also noted this was the seventh consecutive quarter of double-digit shipment decline for HP. HP shipments in EMEA dropped by 37 percent compared to a year ago but declined less steeply in the US market.

Dell saw its fourth consecutive quarter of year-over-year decline. Asia Pacific was its hardest-hit market, with shipments down by over 40 percent%. Dell’s decline was largely driven by the weak business PC market.

“Business PC demand was slow overall this quarter, but the small and midsize business (SMB) market was especially weak due to economic uncertainties,” said Kitagawa.

“IT has remained a top area for SMB spending as organisations recognise the importance of leveraging technology for growth, but PCs are often the first area to face budget cuts as the product life can be extended. In contrast, spending in other technology segments such as software and IT services is expected to grow in 2023.”

Regional performance

The US PC market declined 25.8 percent in the first quarter of 2023, Gartner found. While the US economic outlook in the first quarter of 2023 was better than initially anticipated, particularly for consumer spending, it did not significantly impact PC sales as consumers opted to spend their money elsewhere.

Meanwhile the EMEA PC market experienced a significant decline of 35.9 percent compared with a year ago, with shipment volumes for the whole region falling below the total US shipment volume.

“The continued impact of political unrest, inflationary pressures, interest rate increases and a pending recession has culminated in another massive decline in the EMEA PC market,” said Kitagawa. “None of the top six vendors were immune from the collapse, all losing more than a third of their shipment volumes year-over-year.”

Over in the Asia Pacific region the PC market also had a significant decline, with China suffering the most due to high inventory in the channel and weak demand. Outside of China, the PC market was also weak due to inflation, increasing interest rates and local currency depreciation, said Gartner.

However, countries including India and Vietnam fared slightly better due to the shift of manufacturing sites and business operations out of China, as organisations tried to diversify to reduce over-reliance on China as a single production source.

The Japanese market saw a relatively moderate decline at 9.8 percent compared to other regions.

IDC findings

The Gartner results come days after rival analyst house IDC Research reported that PC sales worldwide fell by 29 percent in the first quarter of 2023, with Apple seeing the biggest decline.

IDC said that PC shipments reached 56.9 million units for the quarter, down from 80.2 million in the same period a year earlier.

IDC said that Apple’s PC sales declined by 40.5 percent, the biggest of the top five biggest PC makers, followed by Lenovo Group and Dell Technologies with drops of more than 30 percent.

The quarter continued a similar year-on-year decline of 28.1 percent in the fourth quarter, IDC noted, due to weak demand, high inventory levels and slumping economies.