The pain in the PC industry is only getting worse as sales continue to fall after explosive growth at the height of the pandemic. According to research firm Gartner, global PC shipments fell by a staggering 28.5% in the fourth quarter of 2022, the largest decline since the company began tracking shipments in the mid-1990s.
This decline is particularly startling considering consumers tend to spend more on electronics like laptops and desktops during the holidays.
“Expectations of a global recession, rising inflation and higher interest rates have had a major impact on PC demand,” said Mikako Kitagawa, Gartner’s director analyst, in a statement.
“With many consumers already owning relatively new PCs purchased during the pandemic, lack of affordability is crowding out any motivation to buy, pushing consumer PC demand to its lowest level in years.”
But it’s not just consumers. Kitagawa said sales of corporate PCs have also fallen as companies delay purchases amid fears of a slowing economy. The company’s sales aren’t expected to grow again until sometime next year.
Apple computer shipments are down more than 10% year over year, according to Gartner. (Photo by Zhang Peng/LightRocket via Getty Images)
No major PC vendor was spared the declines, with Acer seeing shipments fall 41% year over year from 6.1 million in Q4 2021 to 3.5 million in Q4 2022. Lenovo, HP (HPQ) and Dell ( DELL), the top PC vendors, saw declines of 28.6%, 29.1%, and 37%, respectively.
Apple (AAPL), meanwhile, saw shipments decline 10.2% year-on-year from 7.8 million in Q4 2021 to 7 million in Q4 2022.
Chipmakers like Intel (INTC), AMD (AMD), and Nvidia (NVDA) have each had poor financial results in recent quarters. In the third quarter, Intel reported revenue of $15.3 billion, down 15% year over year, while Nvidia reported a 17% decline in revenue to $5.3 billion. AMD, meanwhile, revised its Q3 results downward as PC sales slowed.
The PC and chip industry is grappling with the aftershocks of the early days of the pandemic, when the initial thought was that consumers would cut back on spending during lockdowns. Instead, workers, students, and average people began flocking to buy laptops and desktops for everything from their work to school to entertainment.
The story goes on
Chipmakers struggled to catch up, and PC makers did the same to eventually meet demand. Now, however, chip and PC makers are working their way through an inventory glut and reaching their bottom line.
Kitagawa previously predicted that the industry would return to growth sometime in the next 5 years. This is roughly the time by which many pandemic-era consumers’ PCs will be nearing the end of their lifecycle.
Until then, the industry looks like it’s going to be a bumpy ride.
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