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PC Slowdown Will Drain Shipments Through 2023: IDC

Shane Snider

Research firm shows drop in expected shipments for personal computers and tablets through at least 2023, but sales will stay stronger than pre-pandemic numbers – for now, at least. ‘Overall, this report is not a surprise, and we’re confident we can manage through it,’ one partner says.

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Research firm IDC said on Thursday that PC and tablet shipments will suffer into 2023, another indication of the macroeconomic forces taking hold across the globe.

But it’s not all bad news – the shift to hybrid and remote work could sustain sales as the economy falters in the short term. However, increased inflationary costs will surely take a significant bite out of those expected profits, experts said.

IDC projects global shipments of traditional PCs to decline 12.8 percent in 2022 to 205.3 million units and table shipments to drop 6.8 percent to 158.8 million units. IDC blamed inflation, a weakening economy and the pandemic-fueled surge in tech buying over the last two years for the demand drop. The firm also expects further declines in 2023 as consumer demand slows and education demand drops off – enterprise purchasing, the firm says, will also suffer because of macroeconomic conditions. The combined market for PCs and tablets is expected to decline 2.6 percent in 2023 before rising again in 2024.

“The demand is slowing, but the outlook for shipments remains above pre-pandemic levels,” Jitish Ubrani, research manager for IDC Mobility and Consumer Device Trackers, said in a statement. “Long-term demand will be driven by a slow economic recovery combined with an enterprise hardware refresh as support for Windows 10 nears its end. Educational deployments and hybrid work are also expected to become a mainstay driving additional volumes.”

Linn Huang, research vice president at IDC’s Devices and Displays, said in a statement, “With Economic headwinds gaining speed, we expect worsening consumer sentiment to result in further consumer market contractions over the next six quarters. Economic recover in time for the next major refresh cycle could propel some growth in the outer years of our forecast.”

Huang added, “Though volumes won’t hit pandemic peaks, we expect the consumer market to drive towards more premium ends of the market.”

Paradigm shift to hybrid work

Palo Alto, Calif.-based HP Inc., for example, is banking on a market shift to more premium business units needed for hybrid work after the IT giant noted a 32 percent drop in notebook revenue year-over-year for its fiscal 2022 third quarter. “Whether we like it or not, volatility is going to stay with us for some time,” HP CEO Enrique Lores said during the company’s Amplify partner event last week. “When we look at the economic situation… inflation, wares, potential energy price increases, the geopolitical situation – clearly things are not stable. And they are not going to be stable for a while.”

However, he said, “We … need to stay optimistic for the long term. When you look at the trends… the trends that define the opportunities that we see, those trends are changing. They will continue to fuel our growth and to create opportunities for us to grow in the future.”

IT channel partners, who have dealt with a rapidly changing business landscape since the onset of the COVID-19 pandemic, are onboard with the shift toward hybrid work – even if that might mean dealing with short-term pains. Persistent supply chain snarls over the last couple of years have meant massive headaches for MSPs and others as they deal with vendor backlogs that can last up to several months – dragging on or downright killing potential profits despite historic demand. The hope is that demand for hybrid and remote work forced by the pandemic will continue even as the pandemic eases into its next phase.

Not all bad news

“The data that shows commercial revenue growing says to me there’s a lot more going on inside the data,” said Harry Zarek, founder of Ontario, Canada-based based Compugen. “We are coming off the highest sales volume the industry has ever experienced. And the mean is not where it was pre-pandemic. We’re effectively at a new number that is 20 percent high than pre-pandemic. So, let’s cheer up. Overall, we are still in a secular increase in the business. That’s the bigger point.”

Zarek said the pandemic forced a shift in hybrid work that is ultimately more profitable for channel partners. “The hybrid shift is forcing customers to buy the premium brands with more capability and more flexibility,” he said. “That’s helping with overall profitability in the industry.”

He also said the situation will also force PC vendors to be more competitive on wholesale pricing.

“Competition is not bad for us,” he said. “Overall, this report is not a surprise, and we’re confident we can manage through it.”

Shane Snider

Shane Snider is a senior associate editor covering personal computing, mobile devices, semiconductor news, hardware reviews, breaking news and live events. Shane is a veteran journalist, having worked for newspapers in upstate New York and North Carolina. He can be reached at ssnider@thechannelcompany.com.

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