Global PC Shipments Plunge, Marking ‘One of the Worst Quarters in Decades’
The prolonged downturn in PC upgrades could have “downstream implications” for partners.
April 11, 2023
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Organizations and consumers aren’t just holding on to their Windows PCs longer. Apple took the most pronounced hit in shipments and market share. Canalys reported that Apple shipped 3.3 million Macs last quarter, compared with 5.4 million a year ago, a 45% decline. Apple also gave up nearly two points in market share, falling from 9.3% to 7.5%.
But from a pure volume perspective, Dell and Lenovo saw the sharpest falloff in shipments, according to both Canalys and IDC. Lenovo shipped 12.7 million PCs last quarter, a 30% decline over the 18.3 million a year earlier. Canalys reported that Dell shipped just shy of 9.5 million PCs in Q1, a 31% year-over-year decline. Although HP wasn’t unscathed, the 12 million PCs it shipped amounted to a slightly smaller 24% decline. HP picked up 2 points of share gain in share, rising from 19.7% to 22.2%.
PC vendors and ecosystem suppliers whose fortunes ride on shipment volumes had warned that the quarter would be weak — last quarter marked the fourth consecutive decline in PC shipments, according to Canalys. It also represented the largest decline, from weak holiday sales resulting in excess channel inventories.
The market largely shrugged off the news, given the early warnings and the overall health of the economy. Senior analyst Ishan Dutt noted that 39% of partners Canalys surveyed said they were sitting on five weeks of inventory. Additionally, 18% reported they had nine weeks or more inventory.
“Most of the issues that plagued the industry in the second half of last year have extended into the start of 2023,” Duff said. “Meanwhile, demand across all customer segments remains dampened, with more pressure arising from further interest rate increases in the U.S., Europe and other markets, where reducing inflation is a top priority.”
Further, the researchers are signaling that the economic slowdown will also last through the next few quarters. Duff indicated that consumers and businesses would continue to defer near-term PC purchases. But he believes there will be a “significant market recovery” starting in the fourth quarter.
IDC research VP Linn Huang shared a similar, though somewhat more cautious, prediction.
“By 2024, an aging installed base will start coming up for refresh,” Huang said. “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.”
Weak demand is having a mixed impact on the channel, particularly MSPs. Josh Liberman, president of Net Sciences, Albuquerque, New Mexico, told Channel Futures that he expected the decline to continue.
“It’s no surprise because there was a lot of purchasing early in COVID to support work from home-and-work from anywhere,” Liberman said. “Now we’re in this valley between those two peaks.”
Moreover, now that customers run more workloads in the cloud, they’re holding onto their PCs longer.
“As long as they can be patched at a hardware level, they’re safe,” he said. “The reality is people want to use stuff longer anyway.”
Still, there is cause for concern, Liberman acknowledged. “For us, hardware is 20% of our revenue and 15% of our profit,” he said. “But for the most part, our real exposure is supporting older and older machines. A seven-year-old machine is going to take twice as much support than a two- or three-year-old machine, whether it’s really hardware decrepitude or operating system bloat or application bloat. They just take more work.”
Liberman said he has structured his business to compensate for that.
“A lot of MSPs mandate five years retirement, or in five years, we up our rates 25% on those devices or users or whatever,” he said. “So, when you roll all those things together, my gut feeling is there’s not a lot of exposure for us, but it’s not a good thing.”
Preliminary results of IDC’s Q1 2023 PC Tracker indicate 23.3 million PCs shipped in the first quarter of this year, a 29% decline compared to the same period last year.
Canalys reported that suppliers shipped 54 million PCs worldwide, 26 million fewer units year-over-year, amounting to a dramatic 33% decline.
Canalys reported that suppliers shipped 54 million PCs worldwide, 26 million fewer units year-over-year, amounting to a dramatic 33% decline.
A sharp plunge in global PC shipments last quarter is adding to the business slowdown channel partners face.
A new Canalys report shows that suppliers shipped only 54 million PCs worldwide during the first quarter of 2023. That is 26 million fewer units than the same period a year ago, amounting to a dramatic 33% decline.
IDC released similarly bleak figures. According to a preliminary release of IDC’s Q123 Worldwide Quarterly PC Device Tracker, suppliers shipped 23.3 million fewer PCs year-over-year. Canalys noted that its latest report marked the fourth consecutive quarterly drop in PC shipments. It was also the sharpest decline.
“It is one of the worst quarters in decades,” Canalys’ chief analyst for channels, partnerships and ecosystems, Jay McBain, noted on LinkedIn. “This has downstream implications for partners — with [fewer] new units coming into managed services contracts and the extension of older units that are tougher to manage, keep repaired and secure against emerging threats.”
See our slideshow above for the impact of plunging global PC shipments on channel partners. We also have some fast facts from the IDC study.
Jeff O’Heir contributed to this report.
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