PC market growth only 'temporary' while AI will drive much needed refresh cycle
An analyst, the CEO of the UK’s largest reseller and the UK’s biggest distie weigh in on the future of the PC market after Gartner finds green shoots of growth
Global shipments of PCs totalled 63.3 million units in Q4 2023, a minor uptick of 0.3 per cent, marking the first increase after eight straight quarters of decline, according to Gartner.
The analyst firm's research shows 2023 as the worst recorded year in PC history, declining 14.8 per cent.
This is the second year in a row with a double-digit decline, with shipments totaling 241.8 million units.
This marks the first time that shipment volume has dipped below 250 million since 2006, when 230 million units were shipped.
Gartner analyst Mikako Kitagawa said the market has hit the bottom of its decline after significant adjustment and normalisation in inventory, with the "subtle growth" suggesting demand and supply are "finally balanced."
However, she warns this situation will likely change due to the anticipated component price hike in 2024, as well as geopolitical and economic uncertainties.
The analyst firm's figures also found that the EMEA PC market saw the highest growth of all regions with 8.7 per cent, its first year-over-year growth since the fourth quarter of 2021.
Channel leaders weigh in
Despite the Q4 increase, Gartner senior research director, analyst Ranjit Atwal tells CRN he believes the growth is short-term.
"I think growth is temporary and more negative quarters may appear, however, gone are days of 20 per cent plus declines," Atwal says.
"The market is consolidating at much lower volumes than we've seen in the past, with overall growth expected in 2024 and 2025."
Atwal adds future AI PCs will bring about a much needed refresh to the market.
"The PC market will be challenging but with Windows 10 replacement cycles coming as the support window closes, older PCs also needing replacing and the marketing hype around AI PCs, will create a much-needed buzz for the industry.
"However the PC industry needs to be careful they don't get carried away by the AI PC hype. Business will need to convert cloud-based GenAI capabilities into business benefits before they see AI PCs over the horizon."
Alex Tatham, MD of distributor Westcoast, shared similar thoughts on the future impact of AI PCs.
"The PC market had some tough comparatives between 2023 vs 2022 - and hence there will be plenty of growth in 2024 in comparison to 2023.
"This will start gently but accelerate as Windows 11 and AI, amongst other things, drive a required refresh cycle."
Softcat CEO Graham Charlton feels "very" optimistic for the market's future.
"The evolution we'll see in PCs as AI applications become more embedded will be exciting."
Charlton also thinks growth levels will be more stable.
"These things are always hard to predict, but there is certainly a big and ageing device estate out there and so I'd expect this to be the beginning of a sustained period of growth," he says.
Charlton believes the PC recovery is "good news" for the channel and expects customers will be looking at other parts of their infrastructure as well as the device.
While Atwal agrees the channel plays a key role in the PC market.
"Recovery allows better future planning. The IT channel has been reactive to the market retraction but now should be able to address the segments of the market that are driving growth."