Global PC shipments dropped by 28% YoY in the first quarter of 2023 to hit 56.7 million units, the lowest quarterly numbers in the past 10 years, excluding the first quarter of 2020 when the COVID-19 pandemic outbreak interrupted manufacturing and production according to Counterpoint Research. The first quarter of 2023 decline was due to the continued delay in demand pickup amid an inventory correction during the quarter.
According to Counterpoint’s projections, the overall PC market will start gradually recovering in the latter half of the second quarter of 2023 which will pave the way for comparably stronger momentum in the second half of 2023.
Global PC Shipments by Vendor, Q1 2023
The last mile of inventory digestion since mid-2022
The PC and PC components’ inventory issue has remained for more than half a year due to frozen demand and aggressive double booking. As we have already entered the post-pandemic era and are settling in with the new work environment and lifestyle, the PC industry has also adapted a lot with incremental demand from each consumer. However, increased devices per person do not imply continuous high-level demand for PCs, especially during economic downturns.
“Fortunately, based on feedback from OEM/ODMs, we are close to the end of PC inventory digestion which is expected by the first half of 2023. PC OEMs could begin executing their next step of PC strategies as consumer demand is gradually increasing,” states Counterpoint in its update.
Major OEMs, especially Apple, had a tough time in the first quarter of 2023
Lenovo remained the world’s largest PC vendor in the first quarter of 2023, despite a huge decline in shipments during the quarter. The company registered shipments of 12.8 million units in the first quarter of 2023 with an overall market share of 23%. HP reported a relatively narrow adjustment in the quarter off a lower base in the past year, maintained its second rank and retained its 21% market share. Dell’s better-than-expected performance in the US helped the company rank third in terms of global PC shipments during the quarter with a 17% market share. Apple suffered the most, marking a 38% YoY decline in shipments due to a higher base in the year-ago period and a longer replacement cycle.
We foresee slow-paced demand recovery
It is widely expected that PC demand will recover in the second half of 2023. PC OEMs are also looking forward to a pickup in demand following the inventory digestion. Although we did say that demand will recover post-inventory normalization, we are afraid demand recovery will take slightly longer to start accelerating. On the other hand, we believe the rate of demand recovery will vary across different categories. Based on our checks, demand for commercial segments and premium/flagship consumer product lines will likely recover faster than others and are expected to sell better in the second half of 2023. Arm laptops continue to be relatively vulnerable due to a lower shipment base a year ago and are more eye-catching to customers.
Inventory Correction Continues while YoY decline improves
Another YoY double-digit percentage shipment contraction is expected in 2023
Although OEM vendors reported another quarterly shipment decline in the first quarter of 2023, they maintain a cautiously-optimistic tone for PC demand in the second half of 2023. We further adjust our 2023 global PC shipments forecasts and expect to see a double-digit percentage shipment decline throughout 2023 from the original high single-digit percentage shipment decline at the end of 2022. Additionally, we expect a bright 2024 due to renewal demand from Chromebook and Windows 11, coupled with a replacement cycle since the outbreak of the COVID-19 pandemic.