The PC industry, comprising personal computers, notebooks, and workstations, has been experiencing a steady decline in demand over the past few quarters. The latest data from IDC on PC shipments reveals some astonishing facts that not only raise concerns for the brands involved but also provide a glimpse into the future. The global PC shipments declined 13.4% YoY in Q2 2023, to 61.6 million units. Believe it or not, this slump marks the sixth consecutive quarter of contraction in the worldwide PC market. It’s as if PCs are going through an identity crisis, desperately trying to find their place in a rapidly evolving tech landscape.
This decline in PC shipments can be attributed to ongoing macroeconomic headwinds, including an impending recession, lacklustre demand from both consumers and businesses and a shift in IT budgets away from splurging on devices.
Surprisingly, contrasting the poor performance of almost all brands, Apple managed to emerge as the shining star in this dark sky. It helped the overall market as it performed better than expectations in Q2 2023! It seems like the folks at Apple have cracked the code to withstand the storm and stay afloat.
Let’s delve into the IDC data, which provides valuable insights into the shipments and market share data of the world’s top five PC companies in Q2 2023, as well as their yearly growth. This data paints a detailed picture of the PC industry’s landscape and sheds light on the factors contributing to the underwhelming performance of key players during this period.
Top 5 PC Brands by Shipments: Highlights
- Lenovo continues to hold the numero-uno position in the global PC market, due to its high-tech Windows personal computers at jaw-dropping prices. However, the brand reported a double-digit decline of 18.4% in its quarterly shipments, totalling 14.2 million units in Q2 2023. Consequently, Lenovo’s market share in the worldwide PC market declined from 24.5% in Q2 2022 to 23.1% in Q2 2023.
- HP Inc. maintained its position as the second-largest PC company globally, holding a 21.8% market share. The company’s strong sales of Chromebooks in the US contributed to its market position. In Q2 2023, HP shipped 13.4 million units of PCs, experiencing a marginal 0.8% decline compared to Q2 2022, when they shipped 13.5 million units worldwide.
- Dell Technologies, surprisingly, faced the highest yearly decline in PC shipments among the top five brands in Q2 2023. The company reported a staggering 22% slump in worldwide PC shipments, dropping from 13.2 million units in Q2 2022 to 10.3 million units in Q2 2023. Additionally, Dell’s market share in the global traditional PC market declined from 18.6% to 16.8% during this period.
- Apple, Inc. (NASDAQ: AAPL) has impressed everyone with its outstanding performance in the second quarter of 2023. The demand for Macbooks and Mac personal computers soared, propelling the Cupertino giant to achieve an impressive 10.3% YoY growth in shipments. Apple shipped a total of 5.3 million units of PCs in Q2 2023, maintaining its fourth position in the global traditional PC market with an 8.6% market share. All thanks to its new ARM-chipset-based processors!
- Another report from Canalys reveals even more astonishing figures; Apple recorded a staggering 50.9% YoY growth in its Mac PC shipments, totalling 6.8 million units worldwide in Q2 2023. These numbers demonstrate Apple’s ability to capture consumer demand with their innovative Mac personal computers.
- Acer Group maintained its position as the fifth-largest PC company globally, despite witnessing a notable 19.2% YoY decline in PC shipments during Q2 2023. The company shipped only 4 million units during the quarter. This decline in shipments also led to a decrease in Acer’s market share, dropping from 6.9% to 6.4% over the past year.
Factors Behind Declining PC Shipments
The continued decline in the traditional PC market for the sixth consecutive period is indeed a cause for concern among manufacturers. This sustained downward trend indicates ongoing challenges and changes within the PC industry. Manufacturers must grapple with factors such as weak demand, macroeconomic conditions, shifting consumer preferences, and the impact of emerging technologies.
Another contributing factor to the weak demand for PCs across the world is the elevated inventory levels. This includes both finished systems at the channel level and throughout the supply chain.
The impact of this inventory burden has affected all major PC manufacturers, with double-digit declines being experienced by leading companies, except for Apple and HP Inc. Apple, in particular, benefited from a favourable year-over-year comparison due to supply issues faced in Q2 2022 stemming from COVID-related shutdowns in the supply chain.
On the other hand, HP encountered an oversupply of inventory in 2022. The company, however, is gradually approaching normalized inventory levels, which has allowed its growth rate to shine even during this challenging period.
Ryan Reith, the group vice president for IDC’s Client Device Trackers, points out that companies are cautious about being caught with insufficient supply, as was the case in 2020 and 2021. As a result, they are hesitant to make substantial investments in anticipation of a potential market rebound. This cautious approach reflects the industry’s uncertainty about the future trajectory of demand and the need to carefully manage inventory levels.
On the consumer side, there is a return to pre-pandemic computing habits, where users share their computing needs across multiple devices. This shift in consumer behaviour indicates that the consumer wallet is likely to prioritize smartphones over PCs, potentially impacting the demand for traditional PCs.
Additionally, on the commercial side, workforce reductions in many large companies, coupled with the introduction of generative AI, have created additional confusion and complexities in decision-making processes. These factors further complicate budget allocation decisions for businesses that already face reduced budgets.
Overall, Reith’s comments shed light on the complex challenges faced by the global PC industry.
The future of the PC industry remains uncertain, and it will require strategic adaptations and innovative approaches to overcome these challenges and propel the industry forward. How will manufacturers navigate the balance between supply and demand, evolving consumer preferences, and budget constraints in the commercial sector? It would be interesting to see!
