PC market suffers amidst worsening economic climate

The global market experienced a major downturn during the third quarter of 2022, with demand dropping sharply, according to a report released this week by technology analysts Canalys.

According to the report, lingering weaknesses in both the education segment and private consumers were made worse by more wary spending on information technology products by businesses, resulting in a drop of 18 per cent in desktop and notebook shipments, which reached 69.4 million units during this time.

“Adverse macroeconomic and industry factors including high inflation, rising interest rates and bloated channel inventories have dented the PC market’s momentum, and are likely to persist into 2023,” Canalys said.

Notebook shipments took the biggest hit, experiencing a drop of 19 per cent year-on-year, with 54.7 million units being shipped in the aforementioned quarter.

Conversely, desktop shipments displayed more resilience in comparison, something which analysts attributed to reduced reliance on consumer spending, resulting in a less pronounced decline of 11 per cent year-on-year, reaching a total of 14.7 million units.

“While the Q3 shipment volume remains comparable to pre-pandemic figures, the rapid deterioration in demand across all segments is a worrying sign not only for vendors, but for stakeholders across the supply chain,” Canalys Senior Analyst Ishan Dutt said.

“Intel and AMD are facing headwinds from weakness in their PC businesses, and smaller makers of components from ICs to memory are cutting production and lowering earnings forecasts,” Dutt added.

Moreover, the analyst explained that despite the fact that certain promotional activities on the retail side have boosted sales, particularly in terms of pre-existing stock just before the busy Christmas holiday period, the overall appetite for PCs in the consumer segment has shrunk due to rising costs and soaring inflation, which have affected other products and services.

“Education deployments, which were an important new source of PC growth in 2021, have also been reduced as public sector funding is directed towards more immediate needs and schools in most developed markets are at an adequate ratio of devices to students with in-person learning largely resumed,” the analyst stated.

Dutt went on to say that “businesses are exhibiting greater caution by extending device refresh cycles as they weather the current uncertainty”, although he did note that “a positive signal for the PC market had been the relatively robust employment and hiring numbers in major markets”.