Global PC shipments decline 9% YoY in Q3 2023

Global PC shipments declined 9% YoY in Q3 2023 as the market continued to be weighed down by weak demand amid a slowdown in consumer and enterprise purchases. However, global shipments grew sequentially for the second straight quarter in Q3 2023 helped by moderate seasonality. We reiterate that the PC market has already bottomed out and are expecting gentle shipment recovery along with several new product launches over the next couple of months, especially from AI function-enabled models.

Vendors are eyeing a shipment comeback next year
Lenovo’s shipments saw a single digit percentage YoY decline in Q3 2023, outperforming most PC OEMs except HP, whose Q3 2023 shipments registered mid-single digit YoY growth in percentage terms as the company benefitted from robust consumer and educational demand. However, other tier 1 PC vendors such as Dell, Apple and Asus still struggled to find strong shipment drivers to boost shipments across the board. Fortunately, we are now entering the first replacement cycle after the COVID-19 pandemic along with a potential pick-up in AI PC momentum as we move into 2024.

AI PC to drive another wave of shipment growth in 2024
Over the past five quarters, PC OEMs have been working hard to resolve inventory issues and have had a difficult time searching for a new growth engine for their PC businesses. In this context, AI PC has emerged as the next big thing and will very likely drive the next wave of shipment rebound in 2024.

We expect AI PCs to have a 50% 10-year CAGR from 2020 and dominate the PC market after 2026 with an expected penetration rate of more than 50%. Intel, Qualcomm and other PC CPU makers are working closely with PC OEMs toward next-generation mainstream models and we expect to see a lot of new product launches after Q4 2023, marking a new chapter for the PC industry.

Annual PC shipments to return to pre-COVID-19 levels in 2024
We expect the global PC market’s shipment volume to return to pre-COVID-19 levels next year helped by the Windows 11 replacement, the next wave of Arm PCs, and AI PCs. Although AI PCs may not gain much traction in the very beginning, we believe that with the increase in applications around the world, AI PCs could progress tremendously in H2 2024. Counterpoint Research