PC OEMs Feel The Pain As Shipments Plummet Even Amid Big Retail Discounts
It's been said for centuries (literally) that what goes up must come down, though not always because of a gravitational pull. To wit, a fresh report from the folks at International Data Corporation (IDC), a market research firm, notes that "PC pain persists" in the first quarter of 2023 for OEMs like Lenovo, HP, and Dell as the market at large returns to pre-COVID spending patterns.
During the beginning and through the peak of the pandemic, there was a big uptick in PC sales as working (and educating) from home became the norm. However, the work-from-home movement is no longer driving PC sales the way it was, resulting in weaker demand. Combined with excess inventory and a worsening macroeconomic climate, PC shipments have fallen off a cliff.
More specifically, IDC's audit of the marketplace found that global PC shipments tallied 56.9 million units in the first quarter of 2023, representing a sizable 29 percent decline from the same quarter a year ago. That figure is also "noticeably lower" than the 59.2 million units shipped in the first quarter of 2019, and 60.6 million units in Q1 2018.
The good news for consumers is that elevated inventory levels could lead to deeper discounts as OEMs and their retail partners struggle to sell more PCs.
"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."
As a result, this could be a great year to buy a new PC, depending on what kind of discounts emerge. Looking a little further down the road, however, IDC expects the market to improve (for OEMs) by 2024, assuming the economy improves by then.
"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. If recession in key markets drags on into next year, recovery could be a slog."
In the meantime, every major PC maker has felt the brunt of current market conditions with each company absorbing big declines in shipments compared to last year. At the same time, they each retained their market share position relative to each other. Here's a look...
Lenovo managed to stay in front of the pack despite a 30.3% decrease in shipments. Meanwhile, HP held onto second place while seeing its shipments drop 24.2%, followed by Dell in third with a 31% decline compared to the first quarter of 2022. Apple and ASUS retained fourth and fifth place, respectively, according to IDC's latest report.
HP, which saw its shipments decrease the least among the pack (in terms of percentage changes), had a chance to leapfrog into the top spot but came 1.3% short of catching up to Lenovo.
