Global PC sales, which surged at the height of the pandemic, have once again started declining. Sales of PCs, which include laptops and tablets, saw an unexpected jump during the peak of the pandemic as millions worked remotely. However, demand appears to be declining once again as things return to normal and people go back to their workplaces and schools.
However, there are several other factors that are posing challenges for the PC market, the supply chain crisis being one of the biggest. It must overcome a number of obstacles, including a supply-chain problem. The industry thus needs to overcome these challenges to bounce back from the present situation.
Global PC Shipments Hit New Low
Several industries were left battered by the COVID-19 outbreak but some also managed to be big beneficiaries of the pandemic. One of them that benefited the most was the PC sector. However, things have shifted once more, and this year’s sales are in free fall.
According to a report from Gartner, global PC shipments totaled 68 million units in the third quarter of 2022, a 19.5% decline year over year. This is the sharpest drop in nine years and the second straight quarter of double-digit decline. PC shipments totaled 72 million in the second quarter, recording a decline of 12.6% year over year.
PC sales started slowing last year once the economy started reopening. This year has particularly been worse given that sales have declined drastically in all the first three quarters of the year.
The primary reason behind the decline in the third quarter was the lack of demand for PCs during the back-to-school season and shrinking enterprise purchasing.
Challenges galore
Industry leaders have been suffering the most because of the decline in demand for PCs. The top three PC makers have likewise had the biggest loss throughout this time, despite the fact that their ranking has not changed.
Lenovo Group Limited (LNVGY – Free Report), which is still the market leader, saw its market share increase in the third quarter of 2022 to 23.7%. However, on a year-over-year basis, LNGVY recorded a 16% decline in sales. This is also the fourth straight quarter of sales decline for Lenovo Group Limited.
HP Inc. (HPQ – Free Report) held its position as the second largest in terms of market share. HP now holds 18% of the market share but it managed to sell only 12.7 million units. This is also the second consecutive quarter when HP had less than 20% market share. Moreover, HP recorded a 26.5% year-over-year decline in sales in the third quarter.
Dell Technologies Inc. (DELL – Free Report), the third largest player, saw its shipments plummet more than 20% in the third-quarter of 2022, after declining 5.2% in the previous quarter.
Apple, Inc. (AAPL – Free Report) is the only company among the top five to post a jump in shipments. AAPL’s shipments grew 7% year over year in the third quarter after recording a 9.3% jump in the previous quarter. AAPL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The United States, one of the biggest markets, has seen a steep decline in PC sales in 2022. The US PC market plummeted 17.3% in the third quarter, recording five straight quarters of declines. Slowing laptop sales is affecting the overall PC market in the United States, although demand for desktops showed modest improvement.
The PC industry is facing several challenges. Inflation has been a major concern in the United States, which has seen people cutting down on expensive goods. The third quarter saw the supply-chain crisis finally easing but high inventory is now a fresh concern as demand continues to shrink in both the consumer and business markets.
Lower demand for PC is also impacting semiconductor sales now. Several chipmakers like it Advanced Micro Devices, Inc. (AMD – Free Report) have said that weaker demand for PCs is impacting its revenues. AMD also said that poor demand for PC is having a negative impact on its outlook.
Overall, 2022 has been fairly challenging for the PC market and experts believe that the market will not improve before 2023. Given the ongoing challenges and weak demand, 2022 is likely to see a 13% year-over-year fall in global PC shipments, according to Gartner. The firm had earlier predicted a 9.5% year-over-year decline in sales
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