Personal-computer shipments plunged in the second quarter to levels not seen since a pandemic buying spree began more than two years ago, and consumer demand “is at risk of perishing in the long term,” according to an analysis released Monday.
Worldwide shipments of PCs dropped 15.3% to 71.3 million in the second quarter, according to a report Monday from International Data Group, the second quarterly decline in a row and a deeper drop than the single-digit one seen in the first quarter. IDC said the second-quarter drop was worse than expected because of persistent supply-chain issues, China’s COVID lockdowns and macroeconomic headwinds, with the biggest declines in shipments coming from U.S. heavyweights HP Inc. HPQ, -2.18% and Apple Inc. AAPL, -1.48%
“Fears over a recession continue to mount and weaken demand across segments,” Jitesh Ubrani, research manager for IDC’s Mobile Device Trackers unit, said in a statement.
“Consumer demand for PCs has weakened in the near term and is at risk of perishing in the long term as consumers become more cautious about their spending and once again grow accustomed to computing across device types such as phones and tablets,” Ubrani said. “Meanwhile, commercial demand has been more robust although it has also declined as businesses delay purchases.”
This year’s second-quarter sales are similar to those at the beginning of the COVID-19 pandemic, when volumes for the second quarter of 2020 were 74.3 million, IDC said. PC sales boomed during the first two years of the pandemic as consumers and businesses stocked up to work from home and use videoconferencing software such as Zoom Video Communications Inc. ZM, -9.53% that taxed older computers.
China’s Lenovo Group Ltd. 992, -0.70% led the pack in shipments, according to IDC tabulations, with shipments declining 12.1% to 17.5 million units, as HP shipments dropped 27.6% to 13.5 million units.
Apple and Asustek Computer Inc. 2357, +1.48% tied for a “statistical” fifth place, IDC said, with Apple shipments dropping 22.5% to 4.8 million units, and Asustek shipments declining 4.6% to 4.7 million units.
And there don’t seem to be any signs of improvement, Citi Research analyst Christopher Danley said in a Monday note.
While June notebook shipments were up 31% month-over-month, that was below his expectation of a 40% rise.
“We expect PC demand to continue to decline throughout 2022 in to 2023,” Danley said. The analyst reiterated his neutral ratings both on Intel Corp. INTC, -2.08% and Advanced Micro Devices Inc. AMD, -3.02% although Intel appears more at risk when it comes to a PC downturn.
Danley said that while AMD derives about 35% of its revenue from the PC industry, 90% of Intel’s sales come from PC and server segments.