Monday, July 10th 2023
Global PC Shipments Continue to Decline in the Second Quarter of 2023 Due to Weak Demand and Shifting Budgetary Priorities, According to IDC Tracker
Global PC shipments declined 13.4% year over year during the second quarter of 2023 (2Q23), according to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. This was the sixth consecutive quarter of contraction brought on by macroeconomic headwinds, weak demand from both the consumer and commercial sectors, and a shift in IT budgets away from device purchases. Despite the poor showing, the market performed better than forecast for the quarter.
The overall weak demand has caused inventory levels to remain above normal for longer than expected. This includes finished systems at the channel level, as well as the supply chain. So far, no PC maker has been immune to the challenges presented by the market. Except for Apple and HP Inc., all the leading companies experienced double-digit declines during the quarter. But Apple benefited from a favorable year-over-year comparison as the company suffered supply issues during 2Q22 due to COVID-related shutdowns within the supply chain. Meanwhile, HP has faced an oversupply of inventory in the past year and is finally approaching normalized levels of inventory, allowing its growth rate to shine during this downturn.
"Elevated channel and component inventory are once again dragging down the market," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers. "And despite these issues slowly easing, many component suppliers continue to offer reduced pricing in an effort to clear their inventory though PC makers and channels are still cautious about new systems due to the reduced demand."
"The roller coaster of supply and demand the PC industry has faced over the past five years has been extremely challenging," said Ryan Reith, group vice president for IDC's Client Device Trackers. "Companies don't want to be caught with short supply like they were in 2020 and 2021, but at the same time, many seem hesitant to make the big bet on a market rebound. On the consumer side, we're seeing a return to pre-pandemic habits where computing needs are shared across multiple devices, and we firmly believe the consumer wallet will favor smartphones over the PC. On the commercial side, workforce reductions (for many big companies) as well as the introduction of generative AI only add more confusion as to where to place an already reduced budget."
The overall weak demand has caused inventory levels to remain above normal for longer than expected. This includes finished systems at the channel level, as well as the supply chain. So far, no PC maker has been immune to the challenges presented by the market. Except for Apple and HP Inc., all the leading companies experienced double-digit declines during the quarter. But Apple benefited from a favorable year-over-year comparison as the company suffered supply issues during 2Q22 due to COVID-related shutdowns within the supply chain. Meanwhile, HP has faced an oversupply of inventory in the past year and is finally approaching normalized levels of inventory, allowing its growth rate to shine during this downturn.
"The roller coaster of supply and demand the PC industry has faced over the past five years has been extremely challenging," said Ryan Reith, group vice president for IDC's Client Device Trackers. "Companies don't want to be caught with short supply like they were in 2020 and 2021, but at the same time, many seem hesitant to make the big bet on a market rebound. On the consumer side, we're seeing a return to pre-pandemic habits where computing needs are shared across multiple devices, and we firmly believe the consumer wallet will favor smartphones over the PC. On the commercial side, workforce reductions (for many big companies) as well as the introduction of generative AI only add more confusion as to where to place an already reduced budget."
15 Comments on Global PC Shipments Continue to Decline in the Second Quarter of 2023 Due to Weak Demand and Shifting Budgetary Priorities, According to IDC Tracker
And I'm disappointed, "Say the Line, Bart!" - where's the mandatory assurance that the next quarter will be the one that will inevitably turn the trend? As I read this assessment doesn't even paint the coming of AI in a completely rosy picture?
"On the commercial side, workforce reductions (for many big companies) as well as the introduction of generative AI only add more confusion as to where to place an already reduced budget."
Monitors were better on each iteration?
For how long have we been stuck with 16GB?
For how long 1080p and 1440p dominated the market?
For how long your hard drive has been 512-1024GB?
Because, check it out, super computers have scaled like crazy. In computational power, (lowered) costs, spread, availability...
For how long nVIDIA has been selling HBM gpus on the datacenter market?
At the same price or more. And now the market has a problem? Maybe has to do with those underperforming consoles which are completely outdated before release? Or maybe they discovered people is willing to pay 600-1000 €/USD to make some photos, watch 4k content in 6 inch display and send a couple of messages. EVERY YEAR. Ah no its piracy the problem, tell steam.
*tinfoilhat* PC is not attractive because the lack of control compared to android-macos-console-os based devices.
Only with a little efford 5 or more years ago, with ECC, quad channel proper PCIE lanes sofware would insta load to 128GB standard PC RAM, os would be completely different. We would rent or share our computational power to friends (for video encoding or stream gaming) or institution (universities, etc) or even private companies.
HBM has been tried, and it isnt cost effective for consumer workloads. You can buy a $200 chromebook that can stream 1080p video without issue, that was impossible 10 years ago.The console excuse comes every generation. They are not the cause.Phones have been in decline for just as long. The majority are good enough, unless someone comes out with a new killer feature the market has reached saturation and only maintenance sales are needed going forward.
store.steampowered.com/hwsurvey
chromebook specs per year:
en.wikipedia.org/wiki/List_of_Chromebooks
market evolution (one of many):
www.boldbusiness.com/communications/mobile-gaming-market-empire/
price for smartphones (you can pay for the forecast):
www.statista.com/statistics/788557/global-average-selling-price-smartphones/
*opinion*,
I would say consoles came late (3-5 years), and weak. Console gamers are mesmerized by 4k, 60fps and *game exclusivity*. PC gamers are not soon discover 120hz, game tweaks and piracy. Consoles allow exclusive (no competition) game-markets and fake discounts. PC do not (more open market). I would dare to say many people is tired of making economical effords to purchase non-working games on launch or even months later, so, they move along. Also, are less prone to long-term scams (candy crash vs. lost ark).
Content creators and streamers are probably the main hook for powerfull PCs (<=> gaming). Once they are famous opt out for a 10k€ mac because looks better in their IG desk-shoots (d5 or A7 markXXXX included with a big f2.0 lense, of course).
Another example: word, premiere and photoshop* have been doing the same for the past 10 years. The problem for them has been handling bigger raw formatted pictures and 4k video WOW. And word... lets forget about 300 pages documents :) all the improvements are in onedrive integration and onenote fuckup.
Other reasons to have a powerful PC in the past 2 years: IA. For photoshop* neural adapted, yes you need CPU for that, topaz, other softwares for consumer IA requires lots of beef. Blender maybe, most CAD/CAM programs and project can run in a 2016 powerfull PC. Compilation? Who is compiling big chunks at home? residual. Audio? They buy a macbook pro as soon as they are not broke. What I'm missing?
Whats left? UE and Unify developers and "developers". Yes, they have had a revolution in their sector in the past decade in terms of game engine availability.
Who else needs a powerful PC? What for?
I mean PC, look at puget, even in a dying market they are doing fine, because those are workstations. 500€ for a TRX80 equivalent "consumer" motherboard, ok its fine, there's stuff there, inflation, whatever. 1200€ for a X670? WTF, who's for? Ok no, a STRIX 600€ what for? B650 300€.
I blame the software in the first place for its lack of innovation.
Current gen consoles weren't outdated before the release, their power was equivalent to upper mid tier PC which was not bad at all.
The lack of ECC is unfortunate, Intel is segmenting really hard. I hoped PCs would be more modular (and better software support), but the current trend is total integration like Apple does. You can share resources even now for certain tasks, right? Hard to provide these services in general since we still don't have IPv6 everywhere, most of data streams have to go through proxies with a public IP address. And virtualization is still not perfect (does video encoding even work there?) and I'm sure you wouldn't want to run any foreign code on your computer.
Public administrations, do they need new pc every 3-years? No, just for amortization plans. Not because the hardware is outdated. We can talk about educational ecosystems poisoned with
chromebooks. Public administration without amoritzation plans, well, they use computers for a decade.
Private companies same thing. Big? Amoritzation plan, nobody cares. Small? The IT guy has to justify up to the last $€: buts i5 instead of xeons, and 1030GT instead of P2000.
Many of these workplaces soon to be replaced by IA (call centers, customer services, and some other administrative tasks).
Individuals.
The average person (not US or Europe) struggles to have an entry to mid level PC. What we could catalogue as <600€$ PC. (monthly salary 100-200€$). Outrageous prices for low tier products.
Teen/20s: As soon as they can, they use a smartphone/tablet. Then, as soon as they can afford it, they shift to S24+ or iphone SLX16. Not to a PC. Windows/Linux has to do with this (I blame software as I said).
Laptops? I would get an iphone before an HP pavilion. Who wouldn't? How many times I've seen people in the university comparing those poor plastic pavilions with a 3 or 4 times more expensive macbook? Or battery life compared to macbook air? What if I'm in the segment who cannot afford pc macs? Pavilion dies: welcome iphone/ipad + keyboard. HP becomes HPE.
Older people: android/ios its "easier to use", like a monkey in the zoo. They may have a laptop in the kitchen for family photos, emails, and domestic economy. Soon to be replaced by a mac "thats what my boy in college has!".
So who is left willing to have a 10kg box on their table (RGB) or floor? See post above.
Strictly in the average-user space ok? No prosumers, etc.
Imagine good priced, super silent nucs + a proper display 10 years ago? imacs dead. macminis dead. many ipads dead, if proper software available.
Imagine proper tablet implementation of windows 10 years ago?
Imagine proper *linux* distros implementation in tablets (or pcs) 10 years ago?
I don't blame people wanting to throw by the window their late Windows 7 i3 4GB 1368x768 laptop compared to a mac. (*3 years later*) Windows 10 landed...
The OS who haven't failed to deliver (so to speak) are android and ios/macos.
The last nail in the coffin: windows streamed from azure, hardware need: AV1 asic and bluetooth for your peripherals.
[*Of course android is linux based OS, the most succesfull OSes in all times? But its premise its, as in IOs, total control over the user (user as a product?) thats why its not included in "proper implementations", its clearly a backwards in functionalities: copy-paste, file management, backups, firewally, program ecosystem, etc.]
I get companies don't buy new PCs as they used to. But here they never did (not counting professions which need lots of performance). I guess only MS with their "Windows 7 and 10 are dead" strategy can force them to buy new stuff. As long as it works....
Who wants a 10kg box? The advantage is cost, universality, freedom and a big screen with ergonomics. And also a tradition. Back in the day and even now you just needed to buy a PC and software is "for free". On the other hand yeah, not that good for tropical climates. In the worst case you can run old operating system and the software will work.
I think I'm fine smartphones/tablets to take over for non-technical people, for those who need mobility or those who just consume content. Although where I live many people will buy the cheapest Chinese electronics which is slow and annoying to use and they are fine with that. Or Samsung A series, Xiaomi, ....
I can't blame people like Apple laptops. I have Dell XPS for SW development and it took year and half until they fixed random wakes and DisplayPort through USB-C disconnects. When I bought cheapest Asus in 2007 for around $800 the resolution was 1650x1080 and couple of years later 1368x768? What a joke. Pavilions are famous to just die after 2 years or so.
Macbooks have their problems too. I had 2016 version and it had problem with a keyboard and USB-C ports getting loose after some time and the connection could be disrupted by changing force on a cable. I moved to Linux, because the performance of Docker was so bad. Also it has been slowly becoming a golden cage.
I think desktops cannot get much cheaper and the main reason is the cost of material and production. And at the same time the cool factor causes there are motherboards for $1k. Personally I hoped NUCs or x86 single board computers would get traction for a good price. ARM ones are still kind of lacking power, software support or are expensive.
Streaming OS from cloud...dunno about that. I'd say most people are not as sheepish and want to have control and also current economics doesn't allow to subside users and users don't like to pay monthly fees.
But that is the problem of perception. There many better laptops from lenovo, some hp, dell, some acer, etc. better than macs, but priced accordingly. Thin-clients are great pcs in small boxes for most tasks and perfecly constrained to force you jump to office desktops (like optiplex) or workstations. People tends to compare macbooks with pavilions not with carbon X1 or XPS15. And ALL have their issues.
Do you think those the demographic groups you mentioned would migrate to a PC if they had the means? Because I think most people with a samsung A would jump to an S before spending the difference in a 800€ desktop PC. Almost anyone with a samsung S will buy a pack of an A plus a PC for some extra money.
The manufacturing process for a 400W and 800W PSU is barelly the same. And only an extreme optimization in components makes any difference in cost. Maybe some caps, some inductors and a couple of diodes and transistors. 5-10€, lets say 20€. Component PC prices are completely artificial for a perfect market-segmentations. Have nothing to do with production or shipping costs in most cases. Target cost its used in the family products not the product itself.
The only problem for me of the PC market decline is the lack of control the user have over the substitues of PCs.
You're probably right with the segmentation.
I wouldn't worry that much that PC market will decline so much, at least for now.