PC Pain Persists in Q1 2023 Due to Excess Inventory and Poor Demand, According to IDC Tracker

[btarunr]

Weak demand, excess inventory, and a worsening macroeconomic climate were all contributing factors for the precipitous drop in shipments of traditional PCs during the first quarter of 2023 (1Q23). Global shipments numbered 56.9 million, marking a contraction of 29.0% compared to the same quarter in 2022, according to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker.

The preliminary results also represented a coda to the era of COVID-driven demand and at least a temporary return to pre-COVID patterns. Shipment volume in 1Q23 was noticeably lower than the 59.2 million units shipped in 1Q19 and 60.6 million in 1Q18. "Though channel inventory has depleted in the last few months, it's still well above the healthy four to six week range," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers. "Even with heavy discounting, channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter."



The pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China. Meanwhile, PC makers are also rejigging their plans for the remainder of the year and have begun to pull in orders for Chromebooks due to an expected increase in licensing costs later this year. That said, PC shipments will likely suffer in the near term with a return to growth towards the end of the year with an expected improvement in the global economy and as the installed base begins to think about upgrading to Windows 11.

"By 2024, an aging installed base will start coming up for refresh," said Linn Huang, research vice president, Devices and Displays at IDC. "If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11. If recession in key markets drags on into next year, recovery could be a slog."

Notes:

• Some IDC estimates prior to financial earnings reports. Data for all companies are reported for calendar periods.
• Shipments include shipments to distribution channels or end users. OEM sales are counted under the company/brand under which they are sold.
• Traditional PCs include Desktops, Notebooks, and Workstations and do not include Tablets or x86 Servers. Detachable Tablets and Slate Tablets are part of the Personal Computing Device Tracker but are not addressed in this press release.

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[kondamin]

Google asks money for chrome OS?

 

[hat]

And yet, prices remain high. Still rocking a 2600k here... No plans to change that any time soon.

 

[kondamin]

And yet, prices remain high. Still rocking a 2600k here... No plans to change that any time soon.

Maybe it’s just that money is worth far less than it used to be.

 

[64K]

Maybe it’s just that money is worth far less than it used to be.

True. Here in the USA inflation has been hell. One trip to the grocery store tells you that much.

 

[Tsukiyomi91]

why bother buying new parts when GPUs are still expensive? Majority here wants to build a complete PC, not for incremental upgrades. Of course no one wants to buy PC parts lately. If vendors and stores aren't moving past their pre-pandemic prices (or scalping prices thanks to the crypto boom), why bother giving them money for? Let them suffer the consequences and leave their inventories to rot.

 

[TumbleGeorge]

Appeal to corporations. We know that the items you are offering us are simply not worth the asking prices. If you want to prosper instead of going broke, drop your prices substantially!

 

[evernessince]

Maybe it’s just that money is worth far less than it used to be.

Modern fiat currency is floating, meaning that it's value is whatever we believe it is. It's not staked on the value of anything real and frankly it's not feasible to have a modern economy staked on gold or silver.

The reason people are getting less bang for their buck today is almost entirely due to greed and the fact that mega corporations can raise consumer prices with impunity, even for essential services and products.

The bird flu outbreak in the US that caused skyrocketing egg prices? Egg producers saw a 600% increase in profits. Mind you it should be noted that said outbreak is entirely the fault of those egg producers in the first place for housing their chickens is such cramped, poor conditions in addition to refusing to vaccinate. Then again these are the same egg producers in the US that don't vaccinate for Salmonella. 450 Americans die each year because we couldn't spend 1c more per lb of chicken, 23,000 hospitalized, and a lot more sick on an annual basis.

why bother buying new parts when GPUs are still expensive? Majority here wants to build a complete PC, not for incremental upgrades. Of course no one wants to buy PC parts lately. If vendors and stores aren't moving past their pre-pandemic prices (or scalping prices thanks to the crypto boom), why bother giving them money for? Let them suffer the consequences and leave their inventories to rot.

The problem is that AMD and Nvidia have consorted to constrain supply and keep prices high. The only blow you could deal to them is leaving PC gaming altogether, otherwise they are going to ensure that even if you upgrade less they are going to extract enough profit from your less frequent purchases to more than offset the lower frequency. The fact that Nvidia was able to keep GPU prices above MSRP during a massive crpto crash, a crash that should have brought a record amount of cards to the market, just goes to show you the control they exert over the market.

When even mid range GPUs like the 4070 (and that's being generous to the 4070 given is closer to a xx60 relative to the 4090) are $600+ something is wrong.

 

[Garrus]

Wow! Apple getting slaughtered here.

Hey Apple, you rasied your prices by 20 percent and you put in a stupid notch. Be smarter.

Imagine if they kept the price at $999 and changed the ram to 16GB standard instead. They would have high sales. Paying $1400 for a $999 laptop with a giant notch and no 120hz for no reason isn't a good business plan.

 

[AusWolf]

Maybe it’s just that money is worth far less than it used to be.

I don't disagree, but then isn't it time for us to earn more?

I mean, if everything costs 20% more only because money is worth 20% less, then I should be earning 20% more, but I don't. I smell an insane amount of corporate greed here whatever way we look at it.

 

[HisDivineOrder]

Modern fiat currency is floating, meaning that it's value is whatever we believe it is. It's not staked on the value of anything real and frankly it's not feasible to have a modern economy staked on gold or silver.

The reason people are getting less bang for their buck today is almost entirely due to greed and the fact that mega corporations can raise consumer prices with impunity, even for essential services and products.

The bird flu outbreak in the US that caused skyrocketing egg prices? Egg producers saw a 600% increase in profits. Mind you it should be noted that said outbreak is entirely the fault of those egg producers in the first place for housing their chickens is such cramped, poor conditions in addition to refusing to vaccinate. Then again these are the same egg producers in the US that don't vaccinate for Salmonella. 450 Americans die each year because we couldn't spend 1c more per lb of chicken, 23,000 hospitalized, and a lot more sick on an annual basis.



The problem is that AMD and Nvidia have consorted to constrain supply and keep prices high. The only blow you could deal to them is leaving PC gaming altogether, otherwise they are going to ensure that even if you upgrade less they are going to extract enough profit from your less frequent purchases to more than offset the lower frequency. The fact that Nvidia was able to keep GPU prices above MSRP during a massive crpto crash, a crash that should have brought a record amount of cards to the market, just goes to show you the control they exert over the market.

When even mid range GPUs like the 4070 (and that's being generous to the 4070 given is closer to a xx60 relative to the 4090) are $600+ something is wrong.

Nvidia is using AI and other markets to keep costs high because they can take any 4090 and sell it for way more in other markets. Other dies make up a sparing few release, which lets them focus on their high dollar items instead. Right now the only thing that could scare Nvidia into actual competition is a competitor they aren't already price-fixing with.

That'd be Intel. Intel is our only hope because Intel wants the marketshare way more than they want pricing to stay high. Just look at how they compete with AMD in CPU's. Now imagine them bringing that gusto to GPU's. Remember when they showed up with Alder Lake and wrecked AMD so hard they added the 5000 series to first-gen motherboards? I want me a piece of that pricing/performance wham-bam in GPU's.

And even though it might make sense for Nvidia to cede GPU's for AI and other markets where each wafer gets them way more money, Nvidia does NOT want to lose their reputation of being the PREMIER GPU maker, so they'll have to compete even when they don't want to if a company shows up with lots of product and pricing that reflects fair pricing. In a perfect world, that would be AMD, but Lisa's proven she doesn't want to compete. So right now, AMD is content to use but a few wafers to sell GPU's to remind everyone how they're second place and proud of it as a way to sell SOC's for consoles and portables. Plus, so many dies go toward competing with Intel in CPU's.

So why upset Papa Nvidia and lose the pure profit of selling a few to make a lot? One thing we know for sure though is Intel loves to flood the market with cheap product of mostly equivalent performance whenever they get in even a little trouble and right now that sounds great for the GPU space. It's surely the only thing that will wake Nvidia and AMD up and initiate a new price war.

 

[64K]

That'd be Intel. Intel is our only hope because Intel wants the marketshare way more than they want pricing to stay high.

If Intel is our only hope then we are in for a world of pain.

 

[AusWolf]

If Intel is our only hope then we are in for a world of pain.

I think our only hope is gamers and tech enthusiasts waking up to the realisation that we don't actually need those yearly upgrades.

 

[Pumper]

Excess prices you mean.

 

[john_]

Who will upgrade their laptops to get more Efficient cores on Intel, or on AMD older 5000 series APUs, because OEMs keep preffering those over 6000 and Zen 4 7000?
Who will upgrade their desktops to get more Efficient cores on Intel, or pay $300 for a AM5 motherboard when the equivalent AM4 motherboard costed them even less than half?
And who will upgrade their desktops to get the maximum from an RTX 4090 or an 7900 XTX when those new cards come at much higher price than they should?

Maybe consumers do vote with their wallets and see high prices for very few advantages over the systems they are already using.



EDIT: Fixed a small mistake

 

[Bomby569]

so lets artificially lower supply, put everything in a warehouse and keep increasing prices

 

[64K]

I do remember Huang (Nvidia) saying that they were cutting back production of GPUs since demand had decreased.

 

[Bomby569]

I do remember Huang (Nvidia) saying that they were cutting back production of GPUs since demand had decreased.

that's not the issue, the issue is more what they did with the 3*** series. If the stock of old gen was all available prices should be way lower and Huang couldn't ask such a premium for 4th gen if a 3090 was going for 300 usd for example. They aren't doing anything illegal i think, but it's still shady, we paid through the nose for 3*** series card so they could make things a bit less expensive this time, but no they double down on price craziness.

 

[john_]

Nvidia is using AI and other markets to keep costs high because they can take any 4090 and sell it for way more in other markets. Other dies make up a sparing few release, which lets them focus on their high dollar items instead. Right now the only thing that could scare Nvidia into actual competition is a competitor they aren't already price-fixing with.

Nvidia had a competitor they where fearing. AMD. And what happened? Consumers killed that competition.

AMD offered the 6000 series at competitive prices. People ignored that series at it's original MSRP. Then AMD started dropping prices. People kept ignoring them. AMD gone way under MSRP, Nvidia remained over MSRP. People kept ignoring AMD. The press was also ignoring AMD's price drops. But it was celebrating the price drop of RTX 3090 Ti from $2000 to $1600 while advising people to rush and buy those cards at that ridiculous price. Why? Because AMD's sticker on it's cards wasn't as bright as Nvidia's one. So, AMD cards had bad RayTracing, horrible drivers, their dies where cracking, they where exploding and killing their owners. Both press and consumers where working for Nvidia and they still are. I mean how many times does someone needs to hit his head on the wall to understand that every time that will hurt? I guess too many. Nvidia controls the market, controls the pricing and yet, that's AMD's fault. Well AMD tried with 6000 series and when it saw their market share going from 25% to sub 10%, they just stopped. They will let Nvidia drive the market where it wants while they will keep focusing on EPIC, Ryzen and APUs.

That'd be Intel. Intel is our only hope because Intel wants the marketshare way more than they want pricing to stay high. Just look at how they compete with AMD in CPU's. Now imagine them bringing that gusto to GPU's. Remember when they showed up with Alder Lake and wrecked AMD so hard they added the 5000 series to first-gen motherboards? I want me a piece of that pricing/performance wham-bam in GPU's.

But yeah, Intel will save us. Another PREMIUM brand will start selling us cheap stuff, because, well, because their sticker is also shiny. Let's ignore that they sell directly to OEMs and don't really care about retail. Let's ignore that their marketing material was focusing on RTX 3060 to justify their pricing, because if they where also including AMD options in their marketing material, they would have a problem building their case. Let's ignore the fact that press also "chose" to follow in most cases Intel's marketing material and focus on comparing ARC GPUs to Nvidia options that where keep selling OVER MSRP. And let's forget that Intel is way behind in performance, drivers stability and also Raja is gone, meaning they probably decided for various reasons, probably financials, to not push ahead hard, seeing also Nvidia having put their foot on the pedal and not slowing down, only accelerating(on the high end, not mid range, definitely not low end, where low end is $300 now).

Yes, Intel will save us. Because, how do they compete with AMD in CPUs? By offering only 8 Performance cores at max and all other cores being Efficient cores? By winning in benchmarks where their CPUs with EFFICIENT cores hit 300W power consumption?

And even though it might make sense for Nvidia to cede GPU's for AI and other markets where each wafer gets them way more money, Nvidia does NOT want to lose their reputation of being the PREMIER GPU maker, so they'll have to compete even when they don't want to if a company shows up with lots of product and pricing that reflects fair pricing.

Nvidia will NOT lose their reputation in gaming GPUs as long as they have the high end. So they will remain the top power by winning benchmarks with the RTX 4090 at $1600 and selling people an RTX 4070 at $600, latter by winning benchmarks with a $2000 RTX 5090, while selling people an RTX 5060 at $550, then by winning benchmarks with an RTX 6090 at $2200, while selling people an RTX 6050 at $500. Don't worry. They know what they are doing.

In a perfect world, that would be AMD, but Lisa's proven she doesn't want to compete. So right now, AMD is content to use but a few wafers to sell GPU's to remind everyone how they're second place and proud of it as a way to sell SOC's for consoles and portables. Plus, so many dies go toward competing with Intel in CPU's.

AMD offered RX 6500XT in a period where new GPUs where selling for over $400. All rush to attack them for reasons that where valid. Then Nvidia push out GTX 1630, a much older, slower card that was selling at about the same time. Most remained quiet. RX 6600 is cheaper than RTX 3050. People keep buying RTX 3050. Why? For it's RT performance? In a perfect world, people whould have switch to AMD and Nvidia's RTX pricing would have been much better today. Consumers proven that they are hypnotized by that Nvidia sticker, so Lisa chose to focus on it's core business, CPUs and let Nvidia drive pricing where it wants.

So why upset Papa Nvidia and lose the pure profit of selling a few to make a lot? One thing we know for sure though is Intel loves to flood the market with cheap product of mostly equivalent performance whenever they get in even a little trouble and right now that sounds great for the GPU space. It's surely the only thing that will wake Nvidia and AMD up and initiate a new price war.

So, why papa Nvidia get upset when they can see that no matter pricing people and press will still support papa Nvidia with their wallets and their reviews? And yes Intel is happy to fllod the market with cheap products when comparing with an RTX 3060. Now check performance and pricing against AMD's offering and you will realize that you are a victim of Intel's marketing and the way the press covers Nvidia and Intel. With love and tenderness.


The era where people where screaming at AMD to offer cheap options, to push Nvidia and Intel to lower their prices, so the same people can give their money to Intel and Nvidia has ended. Consumers and tech sites managed to make this duopoly a monopoly again. Intel is years away from becoming an option and based on their pricing, marketing and the departure of Raja, they will never be a budget option. Let's not forget that Intel sells directly to OEMs. They don't need retail. How do you think they jumped from 0% to 6% in GPUs? By selling at retail?

Consumers laugh and ignore the competition because it's not premium enough, while praising the company that increases prices, but is the premium brand, the brand they wish to own. And what do they hope now to happen? They hope another premium brand, years away from being competitive, will finally save them.
There is no hope.

Let's enjoy an era of Efficient cores and $500 mid range cards with Fake Generation (from all brands).

that's not the issue, the issue is more what they did with the 3*** series. If the stock of old gen was all available prices should be way lower and Huang couldn't ask such a premium for 4th gen if a 3090 was going for 300 usd for example. They aren't doing anything illegal i think, but it's still shady, we paid through the nose for 3*** series card so they could make things a bit less expensive this time, but no they double down on price craziness.

Why sell at $300, when people feel blessed to buy at $1200?
Why lower prices or offer better mid range options, when consumers ignore the competition?

 

[Sithaer]

I think our only hope is gamers and tech enthusiasts waking up to the realisation that we don't actually need those yearly upgrades.

Yeah I usually sit on my budget-mid range hardware for 2-4 years until I upgrade to a new budget-mid range. 'sell the old one on the second hand market to help paying for the new one'
Too bad even that price range is pushed way higher nowadays. 'this is why I'm only buying second hand GPUs for many years now, way too expensive for me otherwise'
So far I've always managed to play everything I was interested in, don't need mega ultra settings at 120+ FPS to enjoy my games.

I did play around with the idea of upgrading my CPU but I'm yet to find an actual reason for it so not yet, GPU will stay for 2-3 years unless it dies on me.
I aint planning to upgrade my resolution either so that should help with longevity. 'a better panel/monitor maybe but a higher res one, nope'

True. Here in the USA inflation has been hell. One trip to the grocery store tells you that much.

Same here in my crappy EU country, far as I know we had one of the highest increase on groceries in EU in the recent times.
Some stuff literally cost double than what it used to and for sure I'm not making double the money.

I went for a little shopping a few days ago to have a cheat day and I paid 2.7$ for a 140g bag of potato chips.
For reference my job pays me ~3.5-4$/hour. 'this is average/normal here'

With that in mind ofc I'm not rushing to go buy expensive hardware I don't even need.

 

[Bomby569]

Why sell at $300, when people feel blessed to buy at $1200?
Why lower prices or offer better mid range options, when consumers ignore the competition?

because they are a duopoly (intel is barely relevant, hell even AMD is barely relevant), if there was just 2 banana producers in the world, the price of bananas would be much higher, they would manipulate supply, just like Nvidia (and AMD) is doing. That should be regulated but isn't. This is just basic economics.

The "competition" has a worst product at similar prices, it's hardly a good alternative.

 

[john_]

because they are a duopoly (intel is barely relevant, hell even AMD is barely relevant), if there was just 2 banana producers in the world, the price of bananas would be much higher, they would manipulate supply, just like Nvidia is doing. That should be regulated but isn't. This is just basic economics.

The "competition" has a worst product at similar prices, it's hardly a good alternative.

What if there where 2 banana producers in the world and consumers where ignoring the one producer, because his bananas were a little thicker or a little longer or they didn't have the right shade of yellow, even though the taste was similar to the other producer's bananas? Would we ignore the taste and consider the other charachteristicks as an indication of a worst product?

There are many cases where AMD's products where doing the job as good or even better than Nvidia options at the same or higher prices. Now, if someone who uses his GPU purely for gaming, can't live without CUDA, Nvidia's streaming features and Optix support, what can I say? Buy Nvidia, no matter the price. It's AMD's fault.

 

[Bomby569]

What if there where 2 banana producers in the world and consumers where ignoring the one producer, because his bananas were a little thicker or a little longer or they didn't have the right shade of yellow, even though the taste was similar to the other producer's bananas? Would we ignore the taste and consider the other charachteristicks as an indication of a worst product?

There are many cases where AMD's products where doing the job as good or even better than Nvidia options at the same or higher prices. Now, if someone who uses his GPU purely for gaming, can't live without CUDA, Nvidia's streaming features and Optix support, what can I say? Buy Nvidia, no matter the price. It's AMD's fault.

I bought a rdna 1 card, so i bet on amd when most didn't. It sucked, drivers were awful, support was awful, i won't buy AMD again unless the price difference is much greater. It's their own fault.
If this was some kind of AMD allergy people wouldn't be buying Ryzen like they do.

But making this a AMD vs Nvidia, when AMD prices just as badly (slightly badly for an inferior product to be more precise) and manipulates supply in the same way (warehouses products) is idiotic.

 

[BSim500]

What we need is better optimised games. Somedays I feel "blessed" in losing interest in modern AAA's and avoiding a lot of the "Who can brag the most about spending £1200-£2000 brute-forcing through the sh*ttiest code only to end up an unpaid volunteer beta-tester anyway?" mindless rat-race. Clearly a lot of others are voting with their wallets too or there wouldn't be an "excess inventory / poor demand" 'problem' in the first place...

 

[john_]

I bought a rdna 1 card, so i bet on amd when most didn't. It sucked, drivers were awful, support was awful, i won't buy AMD again unless the price difference is much greater. It's their own fault.
If this was some kind of AMD allergy people wouldn't be buying Ryzen like they do.

But making this a AMD vs Nvidia, when AMD prices just as badly (slightly badly for an inferior product to be more precise) and manipulates supply in the same way (warehouses products) is idiotic.

The RX 5700 series had enjoyed good acceptance from the public and tech press, and both press and consumers weren't rushing to adopt in an instance a negative stance against it. And there where plenty of excuses to do so. That was a motivation for AMD to come up with a series that was closing the gap between Radeon and GeForce cards, the RX 6000. But things changed these last two years, with both consumers and press adopting a negative stance against AMD and it's products, so we see now AMD losing it's interest into competing in the GPU market. Nvidia was terrified a year ago about what the RX 7000 was going to be, that's why we where hearing about 600-800W cards before the announcement of RTX 4090. In the end when Nvidia realized that they have won, that there wasn't going to be fierce competition, wattage gone down, prices remained the same or gone up.

There is a difference between how you see things and how I see things. That's why I changed your banana example in my reply. You see a duopoly with price fixing as the root of the problem. I see a duopoly with price fixing as the result of the problem. And the problem is that consumers are so much certain that AMD is the problem and not Nvidia, that they are shooting their own foot and not even realize it. We have seen in the past, in both the CPU and the GPU market that duopoly was working good enough to have options in every price range. But the thing is that duopoly is NOT working the last 2+ years. Everyone is behind Nvidia and for everything bad Nvidia does, they blame AMD.

Let me give you an example to understand what is happening, why you are wrong and why people who think like you and they are a majority today, only warranty even worst pricing in the future.

AMD profit margin 45%, Nvidia profit margin 65%
AMD card A at $700, Nvidia card A at $800 (same performance) - people buy Nvidia
AMD drops price at $600, Nvidia follows at $700 - people buy Nvidia
AMD drops price at $500, Nvidia follows at $600 - people buy Nvidia
AMD drops price at $400, Nvidia follows at $500 - people buy Nvidia
AMD loses interest because of low or no profit, Nvidia still makes a good profit, because of the higher profit margin they begin with.
Next Nvidia card A comes at $1000, AMD follows with their next card A at $900. AMD NEVER drops price, knowing from the beginning they will lose. Nvidia never drops price, because it sees consumers buying. Consumers blame AMD for the high and stable prices. Because they demand from AMD to fix Nvidia's pricing. Things only get worst in the future.