Canalys Anticipates US PC Market Recovery After plummeting 28% in Q1

PC shipments in the United States declined 28% year-on-year to 14.0 million units in the first quarter of 2023, according to market research by Canalys. Notebook (including mobile workstations) shipments fell 31% to 11.4 million units, while desktop (including desktop workstations) shipments were down 28% to 2.7 million units. Tablets performed better, with shipments dropping just 7% to 10.8 million units, largely driven by Apple’s strong iPad performance.

“A confluence of factors led to the US PC market bottoming out at the start of 2023,” said Ishan Dutt, Principal Analyst at Canalys. “The expected seasonal drop after the holidays coincided with the channel finalizing its inventory correction, resulting in muted sell-in of PCs. On the commercial front, businesses continue to grapple with economic pressures, including three further interest rate hikes since the start of the year. Budget-conscious organizations have extended the life cycle of their existing PCs, with many opting only for critical upgrades.”

Despite the short-term struggle, Canalys anticipates a market recovery on the horizon. US PC shipments in Q4 2023 are expected to grow 6% year-on-year while full-year shipments in 2024 are forecasted to be 13% higher than in 2023.

“There are already positive signs for the industry,” added Dutt. “Inflation has dropped below 5% early in Q2 2023, and there are signals that monetary policy will not tighten further. Business sentiment is improving and commercial demand for PCs is set to re-emerge in the second half of the year. Vendors have reported that end-user device activations rates are relatively strong, which bodes well for shipment volumes once the tail-end of elevated inventories has been worked through. There will be a boost from the education sector during the back-to-school season, mostly benefiting Chromebooks. As we move toward 2024, the transition away from Windows 10 will also become a significant factor for device refreshes. As of Q1 2023, most US channel partners surveyed by Canalys reported that Windows 11 has not yet been a major driver of PC sales. Vendors with broad product portfolios, strong channel management and healthy levels of supply will be well positioned to take advantage of the resurgence in demand.”

Canalys’ PC Analysis service provides quarterly updated shipment data to assess market size and growth opportunities.

Channel Impact^®
The data reflect a mixed bag for the near term, but an opportunity for the channel to be more optimistic moving forward.