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.

IDC's worldwide quarterly personal computing device tracker gathers detailed market data in over 90 countries. The research includes historical and forecast trend analysis among other data. 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.

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.

The top five traditional companies in terms of worldwide shipments in 1Q23 are Lenovo, HP, Dell, Apple, and ASUS. Here, Lenovo leads the pack with 12.7 million units shipped in 1Q23. Its market share is 22.4%. This is a drop of 30.3% as compared to 1Q22, when the company shipped 18.3 million units.

Meanwhile, HP with 21.1% market share in 1Q23, shipped 12 million units. Its corresponding drop is 24.2% as compared to 1Q22, when the company shipped 15.8 million units. 

Dell shipped 9.5 million units in 1Q23 (a drop of 31% as compared to 1Q22), Apple 4.1 million units (-40.5% to 1Q22), and ASUS shipped 3.9 million PCs, which was a drop of 26% for the company as compared to 1Q22. 

"Though channel inventory has depleted in the last few months, it's still well above the healthy four to six week range," says 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 ageing installed base will start coming up for refresh," says Linn Huang, research vice president for 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."