Notebook and desktop unit sales plunged in the first four weeks of 2023, falling by −44% and −23% year-on-year respectively, on the back of low consumer confidence and muted business investment, according to CONTEXT, the global IT market intelligence company.
“Revenues also fell sharply as a result of the drop in demand driven by the economic climate, geopolitical uncertainty and the cost-of-living crisis”, said Marie-Christine Pygott, senior analyst at CONTEXT. “Education deals have dried up since last year, making comparisons unfavourable.”
The amount of excess stock held by distributors across Europe has fallen from a high of 20–30 weeks’ worth six months ago to around 10 weeks now – but this is the result of promotions and heavy discounting in the second half of 2022. Alongside ageing stock, there is still a glut of low-end notebooks in some places, and the cost of inventory is rising everywhere. It is unsurprising, therefore, that distributors trying to avoid a repeat of last year’s overstock are sometimes reluctant to take on new products.
SMB channel hit hard
All channels are starting 2023 with revenues and sales much lower than those of the previous two years, but the biggest difference in notebook revenues is in the SMB channel as smaller sellers are more acutely affected by rising costs – not least of energy – and are having to think about cash flow more carefully during the current downturn.
The gap in revenues from notebooks is not as wide for retailers and etailers, reflecting a stronger-than-expected drop in demand in commercial sales since the end of 2022.
There has been a particularly weak start to 2023 for notebook revenues in Germany where consumer confidence is low and businesses cautious. There have also been very few education sales there, whereas, in Spain, Q4 activity in this sector has spilled over into 2023 leading to a better January. We expect there to be more deals for education notebooks sales in both Spain and Italy in the first half of the year.
Cause for optimism
Revenues from Windows systems have seen a downward trend since the start of the year, but those from Apple systems have recently rallied off the back of new products: some 16,000 M2 Pro-based MacBook Pros were sold at an average of around €2000 per SKU in January. Chrome revenues are down in line with demand from the education sector, and we expect this gap to continue throughout the year.
“The drop in PC sales is to be expected given that the economic downturn is worse than was anticipated a year ago”, added Marie-Christine. “The volatile geopolitical situation is causing businesses to pause investment while consumers continue to suffer from inflation and high energy prices. However, there’s still room for optimism: we can expect product refreshes and pent-up demand to pick the market up by the end of the year, and in particular in the course of 2024.”