Continued slump in device shipments forecasted for 2023

Analyst Gartner predicts that worldwide shipments of PCs, tablets and mobile will drop 4.4% this year, which would mean the second consecutive year of decline. But there is perhaps some light at the end of the tunnel.

Gartner says that a depressed economic market will continue to dampen demand for devices throughout the year, and estimates global shipments of PCs, tablets and mobile phones will clock in at 1.7 billion units – a 4.4% fall. This would be the second consecutive year of decline – in 2022 shipments slumped by 11.9%.

PCs are set to be the worst hit category with a drop of 6.8% according to Gartner’s number crunchers, following a wincing 16% decline in 2022.

The latter part of the year would appear to have been particularly grim. The consensus from Gartner, IDC, and Canalys earlier this month indicated that global PC shipments fell 30% in Q4 2022, while Canalys estimated shipments of phones were down 17% year-on-year for the quarter.

“The depressed economic market will continue to dampen demand for devices throughout 2023. In fact, end-user spending on devices is projected to decline 5.1% in 2023,” said Ranjit Atwal, Senior Director Analyst at Gartner. “Just as business confidence was beginning to recover after the worst of the pandemic, it has now fallen significantly in most regions. We do not expect relief from inflation and the bottom of the recession to occur until the fourth quarter of 2023.”

Gartner says this is basically down to people holding onto older devices for longer, which stands to reason during the economic turmoil of the last year. High inflation rates and impending recession are blamed for wiping out discretionary budgets, or disposable income, and Gartner reckons consumers and businesses alike will extend their PC and tablet replacement cycles by about 9 months by the end of 2023. It’s the same with phones as well, shipments of which are predicted to decline 4% this year.

“Consumers are holding onto their phones longer than expected, from six to nine months, and moving away from fixed to flexible contracts in the absence of meaningful new technology,” said Atwal. “In addition, vendors are passing on inflationary component costs to users which is dampening demand further. End-user spending on mobile phones is projected to decline 3.8% in 2023.”

Gartner expects PC inventory levels to return to normal by the second half of 2023 after significantly increasing in 2022 due to vendors overestimating market demand and ‘because of the collapse in consumer confidence’.

There is perhaps some light at the end of the tunnel for the tech industry towards the end of the year, however, with Gartner predicting: “The downward trend affecting the devices market will lessen in 2023 on the expectation of a less pessimistic economic outlook through 2023, eventually increasing consumer and business spending.”

How much the economic situation calms down will depend a lot on unfolding global events, particularly the war in Ukraine and the growing tensions between the US and China. But while consumers and businesses are still facing bloated costs for all sorts of necessities, it stands to reason for a while at least if tech purchases can be put off then they often will be.

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