Apple experiences steepest 40% drop in computer sales during Q1

PC makers are still dealing with excess unsold inventory, which has made the beginning of the year challenging, as seen by Apple Inc.’s 40.5% drop in personal computer shipments in the first quarter.

According to IDC’s latest report, shipments from all PC makers dropped 29% to 56.9 million units, falling below the levels seen in early 2019, as the demand surge caused by pandemic-related remote work disappeared. Apple Inc.’s personal computer shipments declined by 40.5% in the first quarter, along with other major brands like Lenovo Group Ltd. and Dell Technologies Inc. which registered drops of more than 30%, while HP Inc. saw a decrease of 24.2%. Asustek Computer Inc. completed the top 5 with a fall of 30.3%, indicating that no major brand was spared from the slowdown.

Due to the decrease in consumer spending in the past year, the world’s leading memory chip suppliers have faced double-digit declines in smartphone shipments and are now dealing with an increasing surplus. Samsung Electronics Co., which supplies memory for portable devices as well as desktop and laptop PCs, recently announced that it is reducing memory production after reporting its lowest profit since the 2009 financial crisis.

Jitesh Ubrani, IDC’s research manager, stated that despite the reduction in channel inventory in recent months, it remains significantly higher than the ideal range of four to six weeks. He added that even with considerable discounts, PC makers and channels should anticipate high inventory levels persisting until the middle of the year or even the third quarter.

According to the report by IDC, a positive aspect of the declining demand for personal computers is that it allows manufacturers to consider alternative production options outside of China. This is an opportunity for many factories to make changes, and Apple is gradually diversifying its manufacturing base as tensions between the US and China pose a potential risk to its supply chain.

According to IDC researchers, there is potential for PC makers to rebound in 2024. The rebound is expected to be driven by a combination of an improving global economy and aging hardware that will need to be replaced.