PC Shipments Continue Normalization in 3Q23

Global PC shipments declined 9% YoY in the third quarter of 2023 as the market continued to be weighed down by weak demand amid a slowdown in consumer and enterprise purchases, according to Counterpoint Research. However, global shipments grew sequentially for the second straight quarter in 3Q23 helped by moderate seasonality.

Counterpoint Research reiterated that the PC market has already bottomed out. They are expecting gentle shipment recovery along with several new product launches over the next couple of months, especially from AI function-enabled models.

Lenovo’s shipments saw a single-digit percentage decline in 3Q23, outperforming most PC OEMs except HP, whose shipments registered mid-single-digit growth in percentage terms as the company benefitted from robust consumer and educational demand. However, other tier 1 PC vendors such as Dell, Apple, and Asus still struggled to find strong shipment drivers to boost shipments across the board. Fortunately, we are now entering the first replacement cycle after the COVID-19 pandemic along with a potential pick-up in AI PC momentum as we move into 2024.

Over the past five quarters, PC OEMs have been working hard to resolve inventory issues and have had a difficult time searching for a new growth engine for their PC businesses. In this context, AI PC has emerged as the next big thing and will very likely drive the next wave of shipment rebound in 2024.

Counterpoint Research expects AI PCs to have a 50% 10-year CAGR from 2020 and dominate the PC market after 2026 with an expected penetration rate of more than 50%. Intel, Qualcomm, and other PC CPU makers are working closely with PC OEMs toward next-generation mainstream models and we expect to see a lot of new product launches after 4Q23, marking a new chapter for the PC industry.

The global PC market’s shipment volume should return to pre-COVID-19 levels next year helped by the Windows 11 replacement, the next wave of Arm PCs, and AI PCs. Although AI PCs may not gain much traction in the very beginning, Counterpoint Research believes that with the increase in applications around the world, AI PCs could progress tremendously in the second half of 2024.