Geopolitical and supply chaos dampen PC shipments

Global traditional PC shipments have fallen by up to 15 per cent during the second quarter of 2022 with geopolitical issues and supply chaos touted as the causes. 

According to analyst firms Gartner and IDC, the world’s top three PC vendors, Lenovo, HP and Dell Technologies respectively, all experienced declines during quarter ending 30 June. Gartner claimed shipments fell by 12.6 per cent, while IDC put the figure even higher at 15 per cent.  

Both analysts tied the global shrink towards ongoing supply chain constraints, particularly those stemming in China, alongside ongoing geopolitical uncertainties with regards to the Russia-Ukraine war. 

“The decline we saw in the first quarter of 2022 has accelerated in the second quarter, driven by the ongoing geopolitical instability caused by the Russian invasion of Ukraine, inflationary pressure on spending and a steep downturn in demand for Chromebooks,” said Mikako Kitagawa, research director at Gartner.  

“Supply chain disruptions also continued, but the major cause of PC delivery delays changed from component shortages to logistics disruptions. Enterprise buyers continued to experience longer PC delivery times than usual, but the lead times began to improve by the end of the second quarter, partially because key cities in China reopened in the middle of the quarter.” 

Fears about a global recession are particularly likely to strike hard at the consumer market, according to Jitesh Ubrani, research manager for IDC's Mobile Device trackers.  

"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,” he said.

“Meanwhile, commercial demand has been more robust although it has also declined as businesses delay purchases." 

Commercial PC demand is also showing signs of a slowdown, Ubrani said. However, there are still “pockets of demand” as demand for low-mid range Windows devices remains active and unfilled. 

According to IDC and Gartner, Lenovo held onto the top spot with 17.5 million units shipped in the second quarter. Although this gave it almost a quarter of the market, the Chinese vendor still saw its shipments falling 12.1 per cent year-over-year.  

HP shipped 13.5 million in the second quarter, but also saw the biggest year-over-year loss with a decline of 27.6 per cent. In third place, Dell had 13.2 million units shipped. 

To maintain profits amid rising inflation, PC vendors are having to raise average selling prices (ASPs) despite weakening demand, Gartner claimed. 

“The reduction in the mix of PCs from Chromebooks, which tend to have low price points, and shift to premium products also helped increase the average ASP,” Kitagawa said. “However, an increase in inventory, especially in the consumer channel, could cause an ASP decline as vendors will try to lower inventory.” 

The Asia Pacific market excluding Japan, according to Gartner, declined 5.2 per cent driven by a 16 per cent decline in the China PC market.

“China’s zero COVID-19 policy dramatically impacted the economy with lockdowns in Shanghai stopping carriers and logistics and any online orders and delivery in Shanghai during the time,” Gartner said. 

These slowing figures follow the PC market's 10-year high last year, which was driven by consumer demand stemming from the coronavirus pandemic.