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Gartner figures show an industry stuck between high levels of inventory and a lack of affordable products to tempt buyers in the PC market
The PC market has experienced its largest decline ever, according to analyst Gartner. Preliminary results by Gartner shows that worldwide PC shipments totalled 65.3 million units in the fourth quarter of 2022, a 28.5% decrease from the fourth quarter of 2021.
Gartner said that this figure represents the largest quarterly shipment decline since it began tracking the PC market in the mid-1990s. Gartner’s previous market data also showed poor sales of new PCs. For the year, PC shipments reached 286.2 million units in 2022, a 16.2% decrease from 2021.
The industry has been severely affected by the chip crisis resulting in supply chain issues and the worsening marco-economic climate. Higher PC inventory levels started building in the first half of 2022 and have become a bottleneck for the PC market. Low PC supply caused by high demand and supply chain disruptions through 2021 quickly turned into an excess of supply once demand quickly and significantly slowed.
Mikako Kitagawa, director analyst at Gartner, said: “The PC industry experienced very unusual ups and downs over the past 11 years. After the extraordinary growth period between 2020 and 2021 due to the pandemic, the market has clearly begun a downward trend which will continue until the beginning of 2024.”
According to Kitagawa, the enterprise PC market is also being affected by the slowing down of the economy: “PC demand among enterprises began declining in the third quarter of 2022, but the market has now shifted from softness to deterioration. Enterprise buyers are extending PC lifecycles and delaying purchases, meaning the business market will likely not return to growth until 2024.”
She said that even though PC manufactures offered deep PC discounts during the holiday season in an attempt to lower inventory, consumers were not swayed to spare their money. “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.”
Looking at the top PC manufacturers, while Lenovo maintained 24% market share, the company experienced its steepest decline since Gartner started tracking the PC market. Gartner reported that Lenovo’s shipments fell in all regions except in Japan, declining over 30% in EMEA and Latin America.
Gartner reported that HP and Dell also experienced historically steep declines. In the EMEA region, shipments of PCs from HP decreased 44% year over year. For Dell, Gartner noted that weak demand in the large business market affected shipments in the second half of 2022.
The EMEA PC market had a historical decline of 37.2% in the fourth quarter of 2022, due to 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.”
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Jeanice Catt