LNVGY Lenovo Group Ltd (PK)

By Will Feuer

PC shipments continued to sag in the first quarter, with Apple Inc. leading the decline, as the industry grapples with a glut of inventory after a pandemic-driven surge in demand, according to market research firm International Data Corp.

Global PC shipments fell to 56.9 million in the first quarter, down 29% from the same period a year earlier and below the 59.2 million units shipped in the first quarter of 2019, before the pandemic drove a surge in demand, IDC said.

Apple, which IDC says commands a 7.2% share of the global PC market, saw shipments tumble by 40.5%, leading the drop across the five PC companies analyzed in the IDC report. Lenovo Group Ltd.'s shipments fell 30.3% while HP Inc.'s shipments dropped by 24.2%, according to the report, and Dell Technologies Inc. shipped 31% fewer units than it did a year earlier.

Inventories have come down in the past few months but are still elevated, according to Jitesh Ubrani, a research manager at IDC.

"Even with heavy discounting, channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter," he said.

The data weighed on shares of PC makers, sending shares of Apple, HP and Dell all about 1% lower in premarket trading.

Linn Huang, research vice president at IDC, said the industry could get relief next year as customers look to upgrade aging computers. He warned that an economic downturn could weigh on that recovery.

"If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11," Mr. Huang said. "If recession in key markets drags on into next year, recovery could be a slog."

IDC also noted that the slowdown is giving the industry room to reconsider its supply chain, with many manufacturers exploring production options outside of China.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

April 10, 2023 09:13 ET (13:13 GMT)

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