PC shipments fall at fastest rate ever as businesses slam wallets shut

More analysts emerge to talk up hefty double digit shrink in unit volumes

PC shipments are plunging by record levels as enterprises spend less on devices and sweat assets for longer in the face of a worldwide economic slowdown.

Gartner says 68 million computers were sent into the channel in Q3, down 19.5 percent year-on-year in the steepest decline since the market watcher began crunching unit volumes in the mid-1990s.

This was the fourth straight quarter of year-on-year shrinkage, and "could mark a historic slowdown for the PC market," said Mikako Kitagawa, director analyst.

She said the supply chain disruptions that dogged PC makers during the pandemic had "eased" and now "high inventory has now become a major issue given weak demand in both the consumer and business markets."

IDC had banked on suits still buying computers to offset the noticeable dip in retail sales, it forecast Windows 11 would underpin a massive refresh cycle later this year and next.

"On the business side, geopolitical and economic uncertainties led to more selective IT spending, and PCs were not top of the priority," added Kitagawa.

The education segment was a key component of the wider PC market during the pandemic but analysts think the market is saturated with Chromebooks, following government led promotions in recent years, and budgets were being re-nosed.

IDC yesterday outlined its Q3 PC shipment figures showing Apple was the only top five ranked vendor to grow in Q3. Gartner's numbers indicate all of the major vendors got smaller globally, including the Mac maker.

Ishan Dutt, senior analyst at Canalys, said shipment volumes remain comparable to pre-pandemic levels, dropping in its estimates by 18 percent to 69.4 million. The "rapid deterioration in demand across all segments is a worrying sign not only for vendors, but for all stakeholders across the supply chain", he said.

AMD last week warned investors sales will be out of kilter with its previous forecast by $1.1 billion because the world has stopped buying as many personal computers. Intel will outline its number on 27 October but had already said it was pausing all hiring in the PC division ion Q2 due to a slowdown. Samsung, Micron and Kioxia revealed last week that trade is dipping.

Dutt said component makers from "ICs to memory are cutting production and lowering earnings forecasts." He said he’d heard from PC makers and resellers that commercial purchases "had come under threat as IT budgets were reprioritized or slashed."

"Businesses are exhibiting greater caution by extending device refresh cycles as they weather the current uncertainty. A positive signal for the PC market had been the relatively robust employment and hiring numbers in major market. However, indications that this could reverse will further diminish commercial demand as the need for new PCs drops off."

The cost of borrowing has already risen and it is set to go up further in subsequent quarters, Dutt added. And of course inflation is weighing heavy on household and business budgets.

Canalys is forecasting a market recovery by the second half of next year as older devices in the installed base "will need to be replaced."

The PC industry rose high in recent years but the old adage seems to apply: what goes up must come down. In this case, with a bang. ®

 

Similar topics

TIP US OFF

Send us news


Other stories you might like