The turnaround in the global PC market continues to gain speed as hype around AI PCs grows and enterprise customers start to pick up purchases of laptops and desktops. According to early data from market research firm IDC, the PC market grew 3%, marking the second quarter of growth after a staggering seven consecutive quarters of declines.
“Make no mistake, the PC market, just like other technology markets, faces challenges in the near term due to maturity and headwinds,” said IDC group vice president Ryan Reith.
While that’s higher than the 1.9% growth rival firm Gartner says the market saw in the quarter, both numbers point to a recovery in a sector that was crushed after it saw sales pulled forward at the start of the pandemic, which suppressed sales in subsequent quarters.
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In Q1 2023, Gartner reported that PC shipments collapsed a stunning 30% year over year, before beginning to tick back up in Q2 2023 when the firm reported PC shipments fell 16%.
“However, two consecutive quarters of growth, combined with plenty of market hype around AI PCs and a less sexy but arguably more important commercial refresh cycle, seems to be what the PC market needed. The buzz is clearly around AI, but a lot is happening with non-AI PC purchasing to make this mature market show signs of positivity.”
The declines were a rapid turnaround from the explosive growth the PC industry saw in the early days of the pandemic. Consumers and enterprise customers stuck on their couches for months purchased new systems to work from home and for entertainment. But with so many people buying PCs at once, there were fewer customers in need of new machines in subsequent months, sending sales into a nose dive.
Intel (INTC) and AMD (AMD) saw similar declines, with Intel reporting that its first quarter Client Computing Group revenue, the organization responsible for PC chip sales, dropped an incredible 38% compared to Q1 2022. AMD reported a 65% year-over-year drop in net revenue in its Client group in 2023 from $2.1 billion to $739 million.
Since then, sales have continued to improve, as consumers have begun to replace the laptops and desktops they purchased in the early months of 2020.
PC market declines hit everything from software vendors like Microsoft (MSFT), which reported Windows OEM sales, or sales of its Windows operating system to laptop and desktop manufacturers, fell 39% in the company’s fiscal second quarter of 2023.
The market turnaround comes as the PC industry looks to the AI PC as the next leg of growth for laptop and desktop manufacturers. AI PCs are roughly defined as PCs that come equipped with specialized neural processing units.
