Market research firm International Data Corp. sees PC units declining through 2026.
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The great pandemic PC boom is officially history.
Citing concerns about both softening demand and ongoing supply chain challenges, the market research firm International Data Corp. on Wednesday slashed its forecast for 2022 global PC shipments to a decline of 8.2%, from a previously expected 1% dip. IDC now sees global shipments of 321.2 million, down from a February forecast of 345 million units.
And don’t expect a quick rebound: IDC sees PC units declining through 2026 at a compounded annual rate of about 0.6%. For tablets, the story is much the same. IDC now sees 2022 tablet shipments down 6.2%, widening from a previously forecast 2% decline. And IDC sees tablet shipments on average declining about 2% a year through 2026.
Now to be clear, thanks to the pandemic and the work-from-home trend, the PC market is now substantially larger than it was before the pandemic. Unit shipments in 2019 were 270 million, and the year before that 260 million. And the adoption of hybrid work environments should sustain demand for commercial PCs in particular in the months ahead.
But consumer demand is clearly softening, as demonstrated by recent financial results from both
HP Inc.
(ticker: HPQ) and
Dell Technologies
(DELL). For the three months ended April 30, HP saw an 18% jump in commercial PC revenue, partially offset by a 6% decline in consumer PCs. Overall PC units were down 17% in the quarter, with particularly weak demand for low-end laptops. Dell over the same period reported 22% growth in commercial PC revenue, offset by a 3% decline in consumer PCs.
Along the same lines,
Intel
(INTC) CFO David Zinsner warned at a conference Tuesday that the supply chain situation had worsened since the company reported March quarter results. That news spurred Citi analyst Christopher Danely to warn that the PC chip maker could miss current estimates for the June quarter.
IDC PC market analyst Ryan Reith notes that since the firm’s original 2022 forecast, Russia invaded Ukraine, and China has imposed widespread manufacturing shutdowns in response to new Covid outbreaks.
Meanwhile, he says that while the supply chain situation has improved in some areas, there are still serious issues around both manufacturing and logistics. And he notes that about 95% of the world’s PCs are manufactured in China. The situation in China also impacts PC demand in the country, Reith adds.
Reith notes that there are some emerging positive factors that should bolster PC demand over the next two years, including
Microsoft
’s
(MSFT) withdrawal of support for Windows 10 in 2024, which should spur some new commercial PC purchases. And he adds that the emergence of hybrid work environments should also be a positive for PC sales. However, Reith sees soft PC consumer demand ahead, with inflation and other macro issues potentially extending replacement cycles.
While IDC’s forecast reduction was significant, Reith cautions that he sees the risk of further downside in the revised forecast, in particular for consumer PCs
Write to Eric J. Savitz at [email protected]
