The global PC market has had a disappointing run for the last many quarters and Q1 2023 was no different with shipments falling 29%. Apple saw the worst decline among major players as Mac shipments fell 40%.
As Apple underperformed the broader PC industry, its market share fell to 7.2% in the first quarter of 2023 – as compared to 8.6% in the corresponding quarter last year.
According to the data from IDC, Lenovo’s sales fell 30.3% YoY but it was still the largest PC company in the quarter with a market share of 22.4%.
HP came second with a market share of 21.1% but the company’s market share expanded from 19.7% in the corresponding quarter in 2022.
Dell’s PC sales also fell 30.3% in the quarter and with a 16.7% market share it maintained its rank as the third-largest PC company.
Apple too maintained its fourth rank even as Asus now trails it by only 40 basis points.
Meanwhile, the fall in PC shipments is not surprising as the industry is grappling with tepid demand and high inventories.
Falling PC sales have also hit ancillary industries like semiconductors and companies are slashing chip production to maintain the demand-supply balance.
Apple PC Shipments Fell in Q1 2023
As for Apple, while the company stopped providing quantitative guidance since the early days of the COVID-19 pandemic – it still provides directional guidance.
During the company’s December quarter earnings call, it warned that its March quarter revenue performance would be similar to the December quarter – where its revenues fell 5.4% YoY.
Commenting on Mac guidance, Apple said, “For Mac and iPad, we expect revenue for both product categories to decline double digits year-over-year because of challenging compares and macroeconomic headwinds.”
While the fall in Apple’s PC shipments is not surprising, markets are spooked by it underperforming the wider industry by 11 percentage points.
Apple was still the best-performing FAANG stock of 2022 and even Warren Buffett added more Apple shares last year.
- Read our guide on buying Apple stock
Meanwhile, the IDC does not expect the PC industry to witness a turnaround anytime soon.
Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers said “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.”
IDC Sees No Immediate Turnaround for PC Industry
Incidentally, Q1 2023 shipments were even below the levels in Q1 2019 and Q1 2018 which signals that with the current slump PC industry volumes have even fallen below pre-pandemic levels.
In its release, the IDC said, “The preliminary results also represented a coda to the era of COVID-driven demand and at least a temporary return to pre-COVID patterns.”
The IDC sees a demand revival for the PC industry in 2024 and Linn Huang research vice president, Devices and Displays at IDC said, “By 2024, an aging installed base will start coming up for refresh.”
Huang however added a caveat and added “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.”
Recession fears have risen of late amid rising interest rates. While recession impacts most sectors of the economy, some of the investments are largely recession-proof.
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This article was written for Business 2 Community by Mohit Oberoi.
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