A worse-than-expected decline in worldwide PC shipments signals the end of the market’s pandemic-fueled growth, experts say.
Second-quarter shipments of desktops, laptops and workstations fell 15.3% year over year, research firm IDC reported this week. After two years of growth, it was the second quarter of the PC market. Deflated business demand was one of the factors that led to the decline, according to industry observers.
“By and large, the PC boom of the COVID era is over,” said IDC analyst Jitesh Ubrani.
Manufacturers shipped fewer than 80 million PCs for the first time in seven quarters, and managed just 71.3 million devices, down from 80.5 million in the previous quarter. Despite the decline, the market remains above pre-pandemic figures. In the second quarter of 2019, manufacturers shipped 65.1 million PCs.
Recession fears have weakened demand for computers, as companies and consumers have tightened their belts, Ubrani said. A report from the US Commerce Department said household spending grew at its slowest annual rate in May.
Demand for business PCs has not declined as quickly. However, some companies have delayed purchases in the face of economic uncertainty, Ubrani said.
Other businesses are looking for lower-cost computers rather than high-performance, easy-to-manage systems, said Enterprise Strategy Group (ESG) analyst Mark Bowker. An ESG survey of 378 IT company buyers found that only 21% prioritized low cost. But Bowker expects that percentage to increase significantly, and IDC reported healthy demand for Windows PCs in the medium term.
Gartner analyst Mikako Kitagawa said computer saturation is coupled with economic concerns. Many companies that needed laptops for remote and hybrid work already bought them. As a result, business demand will be reduced to the point where companies have to replace the computers they bought earlier in the pandemic. Kitagawa doesn’t expect that refresh cycle to begin until 2024.
Supply chain and logistics issues also wreaked havoc in the second quarter. China locked down dozens of cities this spring, disrupting the country’s manufacturing sector. Also, many computer manufacturers ceased sales when they stopped doing business in Russia after the invasion of Ukraine.
China has reopened its cities, but experts don’t think it’s enough to change the current trend in the PC market. IDC expects declines to continue throughout the year.
According to IDC, the three major PC manufacturers remained flat in the last quarter. Lenovo gained market share, accounting for 24.6% of shipments in 2021 compared to 23.7%. HP and Dell had 18.9% and 18.5% of the market, respectively.
Acer was fourth, with a share of 6.9%.
Apple, which is heavily dependent on Chinese manufacturers, fell from fourth place due to a drop in production, IDC said. The company fell into a statistical tie with Asus for fifth, with around 6.7% of the market. Apple will recover in the second half of 2022, according to IDC.
The Enterprise Strategy Group is a division of TechTarget.
Mike Gleason is a journalist covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts Milford Daily News, Walpole Times, Sharon the lawyer and Medfield Press. He has also worked and served as editor for newspapers in central Massachusetts and southwestern Vermont patch. He can be found on Twitter at @MGleason_TT.