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Historic low PC sales

Historic low global PC sales

Oversupply and continued low demand for PCs due to economic uncertainties and a lack of purchase motivation led to the second consecutive quarter of historic year-over-year decline in PC sales, market research firm Gartner reports. Worldwide PC shipments totalled 55.2 million units in the first quarter of 2023, down 30% from the first quarter of 2022. 

“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.” 

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“ASPs will increase moderately in 2023 as vendors pass the cost increases for new PCs entering the channel to end users.”

The top vendors in the worldwide PC market remained unchanged in the first quarter of 2023, with Lenovo as the No. 1 in shipments with 23.3% market share, followed by HP, Dell, Apple, Asus and Acer.

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

“IT has remained a top area for SMB spending as organizations recognize 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.”

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Gartner says the US PC market declined 25.8% in the first quarter of 2023. 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.

“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.”

The Asia Pacific 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. 

However, countries including India and Vietnam fared slightly better due to the shift of manufacturing sites and business operations out of China, as enterprises 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% compared to other regions.

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