(Bloomberg) -- Apple Inc.'s personal computer shipments declined by 40.5% in the first quarter, marking a tough start to the year for PC makers still grappling with a glut of unsold inventory.
Shipments by all PC makers combined slumped 29% to 56.9 million units — and fell below the levels of early 2019 — as the demand surge driven by pandemic-era remote work evaporated, according to IDC's latest report. Among the market leaders, Lenovo Group Ltd. and Dell Technologies Inc. registered drops of more than 30%, while HP Inc. was down 24.2%. No major brand was spared from the slowdown, with Asustek Computer Inc. rounding out the top 5 with a 30.3% fall.
The slowdown in consumer spending over the past year has led to double-digit declines in smartphone shipments and an accumulating glut among the world's foremost memory chip suppliers. Samsung Electronics Co., which provides memory for portable devices as well as desktop and laptop PCs, last week said it's cutting memory production after reporting its slimmest profit since the 2009 financial crisis.
“Though channel inventory has depleted in the last few months, it's still well above the healthy four to six week range,” said Jitesh Ubrani, IDC research manager. “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.”
A silver lining is that the cooling demand is giving manufacturers the time and room “to make changes as many factories begin to explore production options outside China,” IDC said in the report. Apple is gradually diversifying the geography of its manufacturing base as brewing tensions between Washington and Beijing threaten to disrupt its carefully orchestrated supply chain.
Read more: Apple Looks Beyond China in Bid to Remake Cook's Supply Chains
Looking toward 2024, the IDC researchers foresee a potential rebound for PC makers, driven by a combination of aging hardware that will need to be replaced and an improving global economy.
--With assistance from Gao Yuan.
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