Explained: Why the PC market is having a bad time worldwide

They say that the numbers don’t tell the whole story. But these ones do and it’s a rather grim tale. Two of the world’s leading research firms — IDC and Gartner — have reported that global PC shipments had their worst fourth quarter in many years.


What is the state of the PC market?

According to Gartner, worldwide PC shipments totalled 65.3 million units in the fourth quarter of 2022. This was a 28.5% decrease from the fourth quarter of 2021.This marks the largest quarterly shipment decline since Gartner began tracking the PC market in the mid-1990s, says Gartner. PC shipments reached 286.2 million units in 2022, a 16.2% decrease from 2021.
IDC shared similar numbers. According to IDC, global shipments for traditional PCs fell “below expectations” in the fourth quarter of 2022 (4Q22) as 67.2 million PCs were shipped, down 28.1% compared to 2021.

How are the likes of HP, Dell, Apple doing?

Almost everyone has seen a decline in shipments in the previous quarter. According to Gartner, Lenovo, which remains the market leader, saw its shipments decline by close to 28% in Q4, 2022. Dell, HP, Acer saw their shipments decline by 37%, 29% and 41%. Apple also saw its shipments decline but did better compared to others as it saw 10% reduction in shipments. HP was hit hardest in the EMEA market, where shipments decreased 44% year-over-year, as per Gartner.
According to IDC, Lenovo saw a 28% decline whereas the likes of HP and Dell saw a 29% and 37% decline in shipments. Apple, as per IDC, saw a 2.1% decline in shipments in Q4, 20222.

What are the reasons behind the decline in shipments?

According to IDC, there are demand concerns as many users across the world have relatively new PCs. The global economic conditions haven’t helped the PC market. “Average selling prices (ASPs) across many channels also fell as excess channel inventory over the course of the past few months triggered discounting in an effort to spur demand,” said Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers.
“The anticipation of a global recession, increased inflation and higher interest rates have had a major impact on PC demand,” said Mikako Kitagawa, Director Analyst at Gartner. “Since many consumers already have relatively new PCs that were purchased during the pandemic, a lack of affordability is superseding any motivation to buy, causing consumer PC demand to drop to its lowest level in years,” Kitgawa added.
The demand for PC was down in almost every part of the world. EMEA region saw 37.2% decline, according to Gartner, because of the intersection of political unrest, inflationary pressures, interest rate increases and a pending recession. “A decline of this magnitude only happens when market demand effectively comes to a halt,” said Kitagawa. “Business and consumer confidence across EMEA has collapsed, leading to a huge drop in PC demand. A massive increase in inventory has also severely limited sell-in opportunities as sellers focus on moving old stock,” he added.
In the Asia Pacific region, the market declined by 29.4% except in Japan. The Chinese Covid-19 policies didn’t help as budget cuts by the Chinese government and uncertainty around changing COVID policies led to a significant drop in overall PC demand.


What next for the PC market?

IDC remains optimistic but says that 2023 could be tough. IDC believes that the commercial segment could drive growth whereas the consumer market remains a “wildcard”. “Consecutive quarters of declines clearly paint a gloomy picture of the PC market, but this is really all about perception,” said Ryan Reith, group vice president with IDC’s Worldwide Mobility and Consumer Device Trackers.Reith said that 2021 was a great year and 2022 was always going or be down compared to that. “There’s no question when we look back at this time that the rise and fall of the PC market will be one for the record books, but plenty of opportunity still lies ahead. We firmly believe the market has the potential to recover in 2024 and we also see pockets of opportunity throughout the remainder of 2023,” he added.

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