Global PC market shrinks 29% in Q1 over poor demand, global meltdown

New Delhi: Weak demand, excess inventory and a worsening macroeconomic climate resulted in the global shipments of traditional PCs recording 56.9 million in the first quarter of 2023, a huge 29 per cent drop compared to the same quarter last year, a report has shown.

Lenovo led the global PC market with 22.4 per cent market share, followed by HP Inc at 21.1 per cent and Dell Technologies at 16.7 per cent.

Shipment volume in the Q1 2023 was noticeably lower than the 59.2 million units shipped in Q1 2019 and 60.6 million in Q1 2018, according to the preliminary results from the International Data Corporation (IDC).

"Though channel inventory has depleted in the last few months, it's still well above the healthy four to six week range," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers.

"Even with heavy discounting, channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter," he added.

Traditional PCs include desktops, notebooks and workstations and do not include tablets or x86 servers.

According to the report, the pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China.

Meanwhile, PC makers are also rejigging their plans for the remainder of the year and have begun to pull in orders for Chromebooks due to an expected increase in licensing costs later this year.

That said, PC shipments will likely suffer in the near term with a return to growth towards the end of the year with an expected improvement in the global economy and as the installed base begins to think about upgrading to Windows 11, the report mentioned.

"By 2024, an aging installed base will start coming up for refresh," said Linn Huang, research vice president, Devices and Displays at IDC.

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," Huang added.

If recession in key markets drags on into next year, recovery could be a slog.