| By Loc Le |
After a sustained decline over eight consecutive quarters, experts are now expecting the PC market to begin recovering. Following an overall strong improvement of PC shipments from PC vendors in the third quarter, the Director Analyst at Gartner, Mikako Kitagawa, believes that “there is evidence that the PC market’s decline has finally bottomed out.”
Pandemic Remote Working Impacted Supply and Demand
When remote working and online learning became the norm due to the pandemic, sales for PC systems surged as consumers needed them to continue their daily responsibilities and for entertainment as they were confined in their homes. As a result, PC manufacturers began stockpiling inventory to ensure they would be able to fulfill the increased demand. This move, however, had an adverse outcome as demand quickly stagnated when consumers started becoming more cautious about spending money as economic concerns such as inflation, increased interest rates, and the possibility of a recession began rising. This left many PC manufacturers with an overabundance of inventory that they have struggled with.
But that problem may be over soon in Kitagawa’s opinion as she expects inventory “to return to normal by the end of 2023, as long as holiday sales do not collapse” and that “consumer PC demand should also begin to recover as PCs purchased during the pandemic are entering the early stages of a refresh cycle.”
Analysts See Optimistic Signs
In addition to the optimistic predictions from Gartner, many executives of PC manufacturers share the same belief. Acer CEO Jason Chen, for instance, said that demand has returned and that the company has already seen year-to-year growth for the third quarter as revenue for their notebooks and desktops have grown by 19.4% and 27.8%, respectively, in comparison to the second quarter. The integration of AI is also aiding in the recovery of the PC market as Intel CEO Pat Gelsinger and AMD CEO Lisa Su both believe that AI-powered PCs will help boost demand in the coming years. Intel also reported that the revenue of their PC unit has declined at the slowest rate in the past eight quarters while AMD has also had their strongest growth in two years for their September quarter.
2024 Likely Brings Market Stability and Growth
Despite many companies hitting rock bottom and an overall lackluster year for the industry, many executives and analysts believe that 2024 will be the year where their situation finally begins turning around. With predictions from Gartner such as a projected 4.9% growth for the worldwide PC market in 2024, stock prices for PC companies have already began rising in anticipation of market’s recovery. On October 27th, for example, Intel’s stock had an astounding growth of 9.3% while AMD, Microsoft, and Dell had smaller growths of 3%, 0.6%, and 2.3%, respectively. Although the PC market may never reach the levels it was once at prior to the pandemic any time soon, if at all, the lessons learned from the market’s collapse along with continued innovation with new technology will certainly help set the industry back on track.