(Bloomberg) – Apple Inc. personal computer shipments fell 40.5% in the first quarter after sluggish computer demand and an industry-wide glut hit the maker particularly hard. Mac.
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Shipments from all PC makers combined fell 29% to 56.9 million units – and fell below early 2019 levels – as the surge in demand driven by remote working in the era of the pandemic has evaporated, according to the latest report from IDC. Among the market leaders, Lenovo Group Ltd. and Dell Technologies Inc. saw declines of more than 30%, while HP Inc. was down 24.2%. No major brand was spared the slowdown, with Asustek Computer Inc. rounding out the top 5 with a 30.3% drop.
The report deals a particular blow to Apple, whose shipments have largely held steady since the start of the pandemic. The company had nonetheless prepared investors for weaker results in some of its hardware, with a tough economic backdrop threatening to dampen enthusiasm for the company’s products.
Declines in the PC market have been seen for several quarters, and a rebound in the second half is still possible, said Bloomberg Intelligence analyst Anurag Rana. Apple could be particularly hurt by increased exposure to the consumer market and tougher comparisons with a strong period the year before, he added.
The drop for Apple is the largest since the start of the pandemic. The company is gearing up to launch its next line of laptops and desktops later this year, Bloomberg reported, including a new iMac.
During an earnings call in February, Chief Financial Officer Luca Maestri said the company expects Mac revenue to decline by a double-digit percentage in the quarter ending March. During the same call, CEO Tim Cook said a successful launch of a computer product the previous year means current MacBook sales figures face tough comparisons and the company continues to face a “difficult” economic environment.
Slowing consumer spending over the past year has led to a double-digit decline in smartphone shipments and a pent-up glut among the world’s major memory chip vendors. Samsung Electronics Co., which supplies memory for portable devices as well as desktop and laptop computers, said last week it was cutting memory production after reporting its weakest profit since the 2009 financial crisis. .
Apple stock fell 1.9% at 2:10 p.m. in New York. Shares of Dell rose 2.3%, while HP gained 1.1%.
A silver lining is that cooling demand gives manufacturers the time and space “to make changes as many factories begin to explore production options outside of China,” IDC said in the report. Apple is gradually diversifying the geography of its manufacturing base as simmering tensions between Washington and Beijing threaten to disrupt its carefully orchestrated supply chain.
Read more: Apple looks beyond China in bid to redo Cook’s supply chains
Looking to 2024, IDC researchers forecast 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 help from Gao Yuan and Brody Ford.
(Updates with third paragraph background, updates to shares)
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