Apple’s 40% drop in PC shipments is the sharpest among the major PC makers

(Bloomberg) — Apple Inc.’s PC shipments fell. down 40.5% in the first quarter, marking a tough start to the year for PC manufacturers still facing an abundance of unsold inventory.

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Shipments of all PC manufacturers combined fell 29% to 56.9 million units — and fell below early 2019 levels — as the surge in demand driven by pandemic-era remote work evaporated, according to IDC’s latest report. Among the market leaders, Lenovo Group Ltd. and Dell Technologies Inc. down more than 30%, while HP Inc. by 24.2%. No major brand has been spared the slowdown, as Asustek Computer Inc. The top five, down 30.3%.

A slowdown in consumer spending over the past year has led to a double-digit drop in smartphone shipments and a glut built up among the world’s largest suppliers of memory chips. Samsung Electronics, which provides memory for mobile devices as well as desktop and laptop computers, said last week that it had cut memory production after reporting the lowest profit since the 2009 financial crisis.

“Although channel inventory has been depleted in the past few months, it’s still well above the healthy four to six week range,” said Jitesh Ubrani, IDC’s research director. “Even with deep discounts, channels and PC makers can expect to continue to have high inventory in the middle of the year and possibly into the third quarter.”

A positive aspect of this is that refrigeration demand gives manufacturers time and scope “to make changes as many plants begin to explore production options outside of China,” IDC said in the report. Apple is gradually diversifying the geography of its manufacturing base as escalating tensions between Washington and Beijing threaten to disrupt its carefully orchestrated supply chain.

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Read more: Apple is looking beyond China in an effort to reshape Cook’s supply chains

Looking ahead to 2024, IDC researchers predict a potential rebound for PC makers, driven by a combination of aging hardware that will need to be replaced and an improving global economy.

– With help from Gao Yuan.

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