(Reuters) -Global shipments of personal computers slumped by nearly a third in the first quarter of 2023, with Apple Inc (NASDAQ:AAPL) dropping the most among the market heavyweights as the industry struggles with a post-pandemic slowdown in consumer spending.
In separate reports published on Monday, market research firms IDC and Canalys blamed weak demand, excess inventory and a bleak economic outlook for the shipment declines of 29% and 33%, respectively.
"Most of the issues that plagued the industry in the second half of last year have extended into the start of 2023," Canalys analyst Ishan Dutt said.
Of the top five PC makers analysed in the reports, Apple saw the largest drop with a fall of more than 40%. That was followed by Dell Technologies (NYSE:DELL) Inc with a drop of around 31%.
Lenovo Group (OTC:LNVGY) Ltd, Asustek Computer Inc and HP Inc (NYSE:HPQ) also faced declines, the reports said.
The data suggests that PC makers are set for another quarter of weak earnings after a 2022 that saw their sales squeezed by the end of the pandemic-driven demand boom.
The pause in demand and growth, however, is giving supply chains time to stabilize after a rocky two years and for companies to explore production options outside China, IDC said.
Both the research firms also predicted the market could start to recover later this year and gather momentum in 2024 if the economic outlook improves.
"We expect significant market upside as consumers look to refresh, schools seek to replace worn-down Chromebooks, and businesses move to Windows 11," IDC said.
But some analysts are less optimistic, considering the crisis in the banking sector and signs that the Federal Reserve will continue on its rate-hiking path to arrest still-high inflation.
"The evidence doesn't seem to support the idea that (the recovery) is going to happen," said Fox Advisors analyst Steven Fox, pointing to the widespread cost cuts across companies.
"We're not looking at a crash in demand from here. We're saying things are sluggish and are going to stay that way."