Global PC sales keep getting worse and worse, and now sales of Apple Macs are leading the race to the bottom, as research firm Gartner added to PC forecasts and analysts searched for a bottom in the PC market.
Gartner said Tuesday that global PC shipments fell 30% to 55.2 million units in the first quarter, compared with estimates released earlier in the week from rival firm International Data Group showing a 29% drop to 56.9 million.
Gartner said an “unfavorable combination of oversupply and continued low PC demand due to economic uncertainties and a lack of purchase motivation led to the second consecutive quarter of historic year-over-year decline.” That follows a quarter where Gartner reported its largest quarterly shipment decline since it began tracking the PC market in the mid-1990s. And that was worse than the previous worst — last year’s third quarter — and so on.
Back in October, IDC’s drop of 15.3%, and Gartner’s 19.8%, turned into the worst quarter ever for PC shipments, followed by another worst quarter ever where those deficits grew to IDC’s 28.1% and Gartner’s 28% declines, compared with the current worsts of 29% and 30%, respectively.
A larger-than-average drop came from Apple Inc. AAPL, -0.76% shipments, which Gartner said fell 34.2% to 4.8 million units. IDC had said Apple shipment dropped 40.5% to 4.1 million units.
IDC and Gartner disagree on certain metrics like Apple’s performance, as has been the case since 2022, but declinesappear to be normalizing.
Read: Apple earnings show steepest sales decline in more than 6 years
A quarter ago, IDC said Apple shipments only slipped 2.1% to 7.5 million units for the holiday-ending quarter, while Gartner said shipments declined 10.2% to 7 million units. Either way, in its last earnings report, Apple reported that fourth-quarter Mac sales fell 29.4% to $ 7.7 billion from $ 10.9 billion a year earlier, well short of the Wall Street consensus of $ 9.4 billion at the time.
“PC pricing pressures intensified during the quarter as vendors offered considerable discounts to clear inventory,” said Mikako Kitagawa, director analyst at Gartner, in a statement. “To drive demand, vendors temporarily reduced average selling prices (ASPs) of PCs already in the channels, but ASPs of new PCs shipping into the channels remained elevated due to inflation-driven supply-chain cost increases.”
“Essentially, PC vendors pursued a strategy to protect margins rather than to pursue market share by lowering prices,” Kitagawa said. “ASPs will increase moderately in 2023 as vendors pass the cost increases for new PCs entering the channel to end users.”
Opinion:Amid big drop in sales, PC makers may soon be paying more in Chromebook licensing fees
Gartner and IDC were closer on projections for other manufacturers. Gartner reported that Lenovo Group Ltd.’s 992, -2.12% shipments fell 30.2% to 12.8 million units from a year ago, HP Inc. HPQ, +0.67% shipments dropped 24.2% to 12 million units, Dell Technologies Inc. DELL, +0.41% shipments sunk 30.9% to 9.5 million, and Asustek Computer Inc. 2357, +0.91% shipments fell 30% to 3.9 million units.
For more: PC market in ‘steepest’ fall since data started being collected in mid-1990s, analysts agree
On Tuesday, B of A Securities analyst Wamsi Mohan forecast an “absolute bottom” in the first quarter, with 2024 being a recovery year for PCs as replacement cycles on pre-COVID computers are coming up, based on the IDC figures.
“Our analysis suggests that industry PC unit sales in 2024 can still grow [year-over-year] even in a bear-case scenario where replacement cycle of various PC categories migrate back higher to pre-COVID levels,” the B of A analyst said. “This indicates to us that [calendar 2023] is likely the bottom for PC unit sales.”
It remains to be seen whether that optimism is already baked into 2023’s tech stock run. The PHLX Semiconductor Index SOX, -0.56% is already up 22.8% this year, while the tech-heavy Nasdaq Composite Index COMP, -0.43% has risen 15%, the S&P 500 index SPX, -0.00% has advanced 7%, and the Dow Jones Industrial Index DJIA, +0.29% has risen 1.6%. Meanwhile, Apple shares are up 23.8% for the year.