Tighter IT Budgets Hit Global Laptop, PC Shipments

Ishan Dutt, a senior analyst at Canalys, said corporate spending had been propping up weak personal-computer sales over the first half of the year, as higher prices and rising interest rates cooled consumer demand.

Now, with businesses reining in IT budgets as they grapple with persistent inflation and higher borrowing costs, the downturn in PC spending is likely to extend into 2023, Mr. Dutt said in a research note.

Rather than making new purchases, he said, many companies are looking to keep their workers’ current desktops and laptops running longer through upkeep and maintenance. “Businesses are exhibiting greater caution by extending device refresh cycles as they weather the current uncertainty,” Mr. Dutt said.

International Data Corp., a technology industry research firm, reported similar declines in third-quarter consumer PC sales. It said average selling prices for desktops and laptops climbed steadily throughout 2021 and spiked earlier this year, as a result of the higher component costs and ongoing supply-chain disruptions. More recently, IDC said, average prices have begun to come back down. The firm is expected to report commercial PC sales next week, said IDC research manager Jitesh Ubrani.

So far, Mr. Ubrani said, large enterprises haven’t started slashing hardware budgets, “although we have heard cases where they are being delayed,” he said. “This unfortunately does dampen the short-term outlook,” Mr. Ubrani said.

IDC estimates that many of the market’s largest computer companies saw double-digit declines in sales over the third quarter, citing key enterprise-tech vendors such as Lenovo Group Ltd.

HP Inc.

and Dell Technologies Inc.

among others

Gartner Inc.

an IT research and consulting firm, estimates that worldwide IT spending will grow by just 3% this year, compared with more than 10% in 2021, dragged down by weaker spending on PCs.

On Monday, Gartner said laptop demand among large enterprises fell sharply in the third quarter, while overall global PC sales saw their steepest decline in over two decades, Gartner said.

In the third quarter, worldwide shipments of personal computers dropped 19.5% from a year ago, Gartner reported.

John-David Lovelock, Gartner’s chief forecaster, said it estimates worldwide business spending on PCs will drop 3.7% by the end of the year, compared with 2021.

The declines come in the wake of “an extended sales cycle for enterprises,” which raced to supply workers with laptops and other devices during Covid-19 lockdowns and extended remote- and hybrid-workplace models, Mr. Lovelock said. He expects business spending on PCs to pick up again in 2023.

“With the forced technology refresh that happened in 2020, to enable work from home and remote education, consumers are sticking with the technology they already have,” including many of the devices they use to work from home, Mr. Lovelock said.

Weaker demand for PCs is already rippling through the technology industry.

Advanced Micro Devices Inc., a computer chip maker, last week cut its revenue forecast for the most recent quarter citing weaker-than-expected demand for personal computers. The company on Thursday said it expected about $5.6 billion of sales in the just-ended quarter, about $1.1 billion less than it previously forecast.

Intel Corp.

AMD’s chief competitor, in the second quarter reported its biggest revenue decline in more than a decade, also blaming a slowdown in PC sales.

Last week, enterprise technology trade group CompTIA said the number of IT job postings by US employers last month fell 12% from August, to roughly 300,000, marking the first decline since the start of the year.

Write to Angus Loten at [email protected]