Yahoo Finance PC Shipments Crashes in Q4 on Weak Demand, Macroeconomic Woes
The decline in personal computer (PC) shipments in the first three quarters of 2022, after two consecutive years of strong year-over-year growth, aggravated in the fourth quarter, according to the latest data compiled by market research firm Gartner.
Per the preliminary data released by Gartner, PC shipments in the October-December 2022 quarter plunged 28.5% year over year to 65.3 million units. The independent research firm claims the decline to be the largest since it has been tracking the PC market since the mid-1990s.
Why is PC Sales Collapsing?
Gartner opines that the year-over-year decline was mainly due to weakening consumer demand for PCs and high inventory levels. Softening IT spending amid the ongoing economic and geopolitical uncertainties resulted in a decline in demand for PCs.
Computer - Mini computers Industry 5YR % Return
Computer - Mini computers Industry 5YR % Return
In 2020 and 2021, PC manufacturers benefited from increased demand amid the pandemic-induced remote-working and online-learning wave. The pandemic necessitated using PC systems for remote work, web-based learning, video conferencing, video gaming, social media, consumer entertainment and streaming or online shopping.
However, the recent back-to-back four quarters of declining PC shipments depict an end to the industry’s demand boom. We believe that consumers have become more cautious about their spending due to inflationary pressure, rising interest rates and fears of a possible recession. Furthermore, Enterprises are delaying their large IT spending amid the macroeconomic challenges.
Gartner, in its report, pointed out that though supply-chain challenges have eased, higher inventory level has become a major issue due to softened demand for consumers and commercial PCs.
Vendor-Wise PC Shipments
Gartner revealed that all vendors registered steep year-over-year declines in their PC sales volumes. Per the data compiled by Gartner, Acer registered the highest fall of 41.2% to 3.59 million units, followed by Dell Technologies’ DELL 37% to $10.88 million PCs.
HP Inc.’s HPQ PC volumes plunged 29.1% to 13.22 million units, while Lenovo LNVGY registered a 28.6% year-over-year shipment decline to 15.66 million units. ASUS shipments contracted 19.8% to 4.88 million, while Apple AAPL witnessed a 10.2% decline to 7.01 million units.
Per Gartner, Lenovo continues to hold the top spot in the vendor list, followed by HP and Dell, with a market share of 24%, 20.2% and 16.7%, respectively. Apple, ASUS and Acer ended the October-December quarter with a market share of 10.7%, 7.5% and 5.5%, respectively.
Among the leading vendors, Dell, Apple and Lenovo each carry a Zacks Rank #3 (Hold), while HP Inc. has a Zacks Rank #4 (Sell). Shares of DELL, AAPL, LNVGY and HPQ have plunged 31.9%, 24%, 28.2% and 26.1%, respectively, year to date.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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