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The wave of declining PC shipments finally caught up to Apple Inc. as the wider industry seeks a reset in product cycles after the tech giant’s Macbooks generally sidestepped holiday weakness a quarter ago.
In a report late Sunday, research firm International Data Group reported that global PC shipments fell 29% to 56.9 million units in the first quarter.
While Apple
AAPL,
had generally avoided weakness in the 2022 holiday season with shipments declining 2% compared with a 28% drop industrywide, the iPhone maker made up for it in the first quarter by leading declines.
“Though channel inventory has depleted in the last few months, it’s still well above the healthy four to six week range,” Jitesh Ubrani, a research manager for IDC, said in a statement. “Even with heavy discounting, channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter.”
Apple’s shipments dropped 40.5% to 4.1 million from a year ago in the first quarter, according to IDC, while leader Lenovo Group Ltd.’s
992,
shipments fell 30.3% to 12.7 million units from a year ago.
Meanwhile, HP Inc.’s
HPQ,
shipments dropped 24.2% to 12 million units, Dell Technologies Inc.’s
DELL,
fell 31% to 9.5 million and Asustek Computer Inc.’s
2357,
fell 30.3% to 3.9 million units, IDC said.
“The pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China,” IDC said. “Meanwhile, PC makers are also rejigging their plans for the remainder of the year and have begun to pull in orders for Chromebooks due to an expected increase in licensing costs later this year.”
Chromebooks run on the Android operating system from Alphabet Inc.’s
GOOG,
GOOGL,
Google.
“That said, PC shipments will likely suffer in the near term with a return to growth towards the end of the year with an expected improvement in the global economy and as the installed base begins to think about upgrading to [Microsoft Corp.’s
MSFT,
] Windows 11,” IDC said.
“By 2024, an aging installed base will start coming up for refresh,” said IDC’s Linn Huang, covering devices and displays. “If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11. If recession in key markets drags on into next year, recovery could be a slog.”
Results represented a coda to the demand that exploded in 2020 when the COVID-19 pandemic suddenly kept millions of people working and attending school from home. IDC said shipment volume in the first quarter of 2023 was “noticeably lower” than the 59.2 million units shipped in the first quarter of 2019 and the 60.6 million in the first quarter of 2018.
Apple shares fell nearly 3% to an intraday low of $160.08, while the Dow Jones Industrial Average
DJIA,
was flat, the S&P 500
SPX,
fell 0.5% and the tech-heavy Nasdaq Composite
COMP,
fell 0.8%.
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