Servers running x86 processors from AMD and Intel used to rule the market, both unit and money-wise, less than a decade ago, but fast forward to today, Arm-based machines command well over 45% of the server market, according to data released by IDC. While technically x86 machines still control 52% of the market in terms of revenue, the real winner is a different category altogether: GPU- and ASIC/FPGA-accelerated systems, which generated over 70% of the global server revenue in the first quarter of 2026.

Server market reaches $122.6 billion in a single quarter, Dell leads the game

IDC estimates that the global server market generated a record $122.6 billion in revenue in the first quarter of 2026, up 30.4% year-over-year, as spending on AI infrastructure remained particularly strong.

Sales of ODM Direct servers — custom machines ordered by hyperscalers that run merchant or custom silicon — accounted for 50.2% of the revenue (down from 64.1% in Q1 2025) and reached $61.53 billion, up modest 2.1% year-over-year*. By contrast, sales of standard servers from well-known brands grew at a much higher pace, which suggests that branded vendors such as Dell, HPE, Supermicro, and others won a larger portion of AI infrastructure deployments than they did a year earlier. That was probably made possible by accelerating enterprise AI deployment and sovereign AI projects, which tend to buy machines from branded vendors, as well as hyperscalers increasingly turning to well-known suppliers for AI hardware.

When it comes to vendor rankings, Dell remained the largest server supplier by revenue with a 16.5% share of the market after its revenue surged 244.1% year-over-year to $20.3 billion, which was driven by exceptionally strong AI server demand. Supermicro remained in second place with $9.3 billion in revenue and a growth of 128.9%.

Lenovo ranked third with $5.6 billion and 36.5% growth, while IEIT Systems (which is a part of the sanctioned Inspur Group) dropped to fourth after revenue declined 7.0% to $4.0 billion. HPE was No.5 with $3.7 billion in revenue, up 17.2%. Other vendors — from Asus to Atos and from ASRock Rack to Gigabyte — commanded 14.8% of the market with $18.11 billion in revenue, up from 13% and $12.21 billion in the same quarter a year ago.

Arm-based machines rapidly gain revenue share

As AI servers dominated the market in Q1 2026, systems with various types of accelerators accounted for over 70% of the revenue. However, the rise of Arm-powered machines is the elephant in the room that is hard to miss, as it represents a tectonic shift in the whole market, both to the Arm instruction set architecture (ISA) in general and custom-built Arm CPUs designed by hyperscalers.

Non-x86 platforms generated $58.7 billion in revenue, a 107.6% increase year-over-year, which lifted their share of the market to 47.9%. Most of the non-x86 systems are Arm-based AI machines (think Nvidia's NVL72) as well as systems running custom CPUs, AWS, Google, and Microsoft, just to name a few. Still, also keep in mind IBM Z mainframes and IBM Power Systems (including storage) that use CPUs featuring proprietary non-x86 and non-Arm ISAs and which still generate $1 billion or more in revenue. IDC claims that Arm-based machines accounted for more than 95% of non-x86 revenue, so it is safe to say that Arm-based machines commanded over 45% of server revenues in Q1 2026.

One of the reasons why Arm-based machines now command a huge chunk of the server market is because they are used inside such systems as Nvidia's NVL72 'Blackwell' that sell for up to $6.5 million per unit. Each NVL72 rack-scale solution carries 36 compute trays with two Blackwell GPUs and one Grace CPU per unit, so while unit-wise each we are only talking about 36 processors, dollar-wise one NVL72 machine is as expensive as 928 entry-level 1P server (for $7,000) for cloud or edge applications or 433 higher-end 2P servers (for $15,000) for cloud or virtualization applications.

Given the fact that Nvidia will continue bundling its own Arm-based Vera CPUs with NVL72 'Vera Rubin' machines that will be more expensive than their Blackwell ancestors, we will not be surprised that Arm-based machines will account for well over 50% of the server market revenue in the second half of this year or in 2027. Also, keep in mind that Nvidia plans to sell server racks featuring only Vera CPUs for agentic AI applications, which will further drive sales of Arm-based machines.

Accelerated servers: The real winner

Since AI servers dominate server sales, it is not surprising that sales of accelerated servers are increasing. Systems equipped with GPUs produced $68.9 billion in revenue during the quarter (up 24.8% compared to the same period a year earlier) and accounted for 56.2% of all server sales. Servers based on other accelerator types, including custom ASICs and FPGAs, expanded to $17.7 billion, up 122.1% YoY. As a result, accelerated servers earned $86.6 billion in Q1 2026, which is around 70.6% of all server revenue.

X86 servers remain unit volume champions, but suffer from shortages

In contrast, x86 server revenue declined 2.9% to $63.9 billion, though IDC attributes this weakness to supply limitations rather than deteriorating demand. The market research firm claims that the industry's primary constraint is no longer customer appetite for general-purpose servers, but rather the availability of key components, including CPUs, DRAM, NAND memory, and hard drives.

Without any doubt, x86 servers remain working horses for the industry. In fact, many of them use accelerators, including ASICs, FPGAs, and GPUs, as they are used for a wide range of workloads, including AI, supercomputing, simulations, encryption, video transcoding, and many more.

AMD and Intel shipped nearly 20 million EPYC and Xeon SP processors for data center systems in 2025, according to Dean McCarron, the head and principal analyst at Mercury Research. He believes Nvidia is on track to ship four million Grace and Vera CPUs this year, which is considerably lower compared to shipments of AMD and Intel. It is hard to estimate how many custom Arm-based CPUs are deployed by AWS, Alibaba, Google, and Microsoft, but it is safe to say that we are talking millions of CPUs here; otherwise, the companies would not be able to justify development and production of custom silicon.

From a volume perspective, x86 servers remain the most popular machines, and it will probably take some time before ARM can challenge x86 in mainstream general-purpose servers. Nonetheless, it is safe to say that Arm-based data center CPUs are catching up with x86 parts in terms of volumes.

Summary

The global server market hit a record $122.6 billion in the first quarter of 2026 as AI infrastructure spending continued. Accelerated systems powered by GPUs, custom ASICs, and FPGAs generated more than 70% of server revenue, while Arm-based platforms — including Nvidia's Grace Blackwell as well as custom CPUs from Arm, Google, and Microsoft — captured nearly half of the market.

Although x86 servers based on AMD EPYC and Intel Xeon processors remain dominant in shipment volumes, supply shortages of CPUs, memory, and storage components constrained revenue growth, which further enabled Arm-powered AI-optimized systems to gain share. But while at 20 million data center processors per year, x86 volumes are untouchable for Arm today, things may change in the coming years. Nvidia is on track to ship 4 million CPUs in 2026, and other developers of custom Arm-based CPUs are certainly not standing still.

*There is one significant difference with IDC's 'ODM Direct' classification. IDC classifies revenue according to which company invoices the customer, not necessarily who manufactures the hardware. As a result, while many AI servers are built by ODMs like Compal, Foxconn, or Quanta, they are sold under brands like Dell or HPE. As a result, while the latter get more business from enterprises or sovereign AI deployments, this does not mean that big ODMs are losing business; they are actually gaining it, as the appetites of hyperscalers like AWS, Google, Meta, or Microsoft are not going anywhere, just demand from new entrants emerges.

IDC on Thursday sharply slashed its expectations for the PC and tablet markets, citing memory shortages, rising prices for 3D NAND, DRAM, and other components, and intensifying supply chain disruptions amid the AI sector boom. While unit shipments are expected to decline significantly year-over-year, higher average selling prices (ASPs) are projected to push total market value slightly upward.

The firm now expects global PC shipments to drop 11.3% in 2026 compared to 2025, a steep revision from the -2.4% decline projected in November 2025 and -8.9% in January 2026. In absolute numbers, this means PC sales will decline by 32.17 million units, from 284.7 million in 2025 to 252.53 million in 2026. To put the 32.17 million PC number into context: Apple shipped 25.6 million computers last year compared to 41.1 million systems for Dell.

Tablet volumes are also set to contract, and IDC forecasts shipments to fall 7.6% this year. Last year, vendors shipped 151.9 million tablets (up 5% compared to the previous year), with Apple leading the pack by a significant margin. If the new IDC forecast holds, then this year the market will decline by 11.54 million to 140.36 million systems. To put the number in context, Apple sold 17.1 million iPads in Q4 2025, while Samsung sold just 6.4 million units.

Even though unit shipments of PCs and tablets will decline, IDC expects market revenue to increase due to rising device prices. The firm estimates that the PC market will expand by 1.6% in value to $274 billion in 2026, while the tablet segment will grow by 3.9% to $66.8 billion.

"The era of bargain-priced PCs and tablets is behind us for now, as rising ASPs and component costs shift the market’s balance of power," said Jitesh Ubrani, research manager for IDC’s Worldwide Mobile Device Trackers. "Memory shortages will persist well into 2027. While we anticipate some easing of prices beginning in 2028, the market is unlikely to return to the pricing levels seen in 2025. Instead, we expect a new normal defined by structurally higher ASPs and a corresponding softening in long-term demand."

IDC noted that, at the time it compiled its forecast, the conflict in the Middle East had not yet escalated to its current level, adding another source of risk for global technology supply chains and economic development. Therefore, the analysts may revise their forecast downwards.

"The overall tech industry, as well as many others, continues to face uncontrollable headwinds that, when compounded, result in massive disruption," said Ryan Reith, group vice president, Devices and Consumer. "The lists of industry and geopolitical events that continue to grow is making decision‑making — and even survival in some sectors — nearly impossible. What has turned all of this from a million‑dollar question into a trillion‑dollar question is the complete uncertainty around when these pressures will subside."

The International Data Corporation (IDC) has published a new update to its device market outlook, and the message is blunt: things are getting worse. Under newly-reported pessimistic scenarios, shipments of PCs could shrink by up to 9% in 2026, with a more moderate scenario showing a 5% shrinkage in the market. These figures have been revised from a 2.5% drop, which was recently published in IDC's November forecast.

Since then, the global memory shortage, which began accelerating in mid-October, has intensified beyond what IDC originally modeled. While the firm isn't formally rewriting its official forecast entirely, it's now laying out scenarios that are notably more pessimistic than what it projected just a few weeks ago.

The underlying driver is the same force distorting much of the tech industry in late 2025: AI infrastructure. Memory demand from hyperscalers has surged so aggressively that DRAM and NAND production has been structurally redirected away from consumer devices and toward high-margin enterprise components like high-bandwidth memory and dense DDR5. This is an economically rational choice on the part of memory manufacturers, but IDC is clear that this isn't a typical boom-and-bust cycle; it's a strategic reallocation of silicon capacity that could persist for years, not quarters.

For smartphones, the impact is real but uneven. Memory represents a meaningful share of handset bill-of-materials costs, especially in the mid-range, where margins are already thin. IDC warns that OEMs are likely to respond with higher prices, reduced specs, or both, reversing a decade-long trend of bringing flagship-class memory configurations downmarket. As a result, IDC now sees downside risk of a global smartphone market contraction in 2026—potentially as steep as 5% in a pessimistic scenario—alongside an increase in average selling prices and longer replacement cycles.

It's the PC market where IDC's revised outlook feels most disruptive, though. The memory shortage is colliding with two major industry forces at once: the Windows 10 end-of-life refresh cycle and the much-touted push toward "AI PCs." Vendors are already signaling broad price increases as DRAM and SSD costs climb, and IDC now estimates that PC average selling prices could rise by as much as 6–8% under a pessimistic scenario. Unit shipments, meanwhile, could decline nearly 9% year-over-year, which is a significant downgrade from November's already negative -2.4% forecast.

Larger OEMs like Dell, HP, Lenovo, and ASUS are expected to weather this environment better than smaller vendors thanks to scale, inventory leverage, and long-term supply agreements. Smaller regional brands, white-box builders, and DIY system builders are far more exposed, particularly in gaming PCs, where high memory configurations are standard, and cost sensitivity is high. IDC suggests this dynamic could shift market share further toward major OEMs, even if the overall market shrinks.

There's a particular irony in how this environment intersects with the industry's AI PC narrative. IDC defines an AI PC simply as a system with an NPU, but in practice, these machines also demand more RAM. Microsoft's Copilot+ requirements alone set a 16GB floor, and many premium designs are targeting 32GB or more. The problem is that memory is precisely the component becoming most scarce and expensive. Just as vendors are trying to upsell consumers on AI-branded systems, the economics of building those systems are deteriorating.

Compounding that tension is the fact that the AI PC marketing push has not produced the growth vendors hoped for. User enthusiasm has been muted, and frustration with the rapid, often forced integration of AI features — particularly in Windows 11 — is increasingly visible. In that context, higher prices for AI PCs look less like an upgrade opportunity and more like a tax on features many buyers didn't ask for.

A 9% downturn might not seem apocalyptic, but it's pretty severe. During the global financial crisis in 2009, the PC market dropped 11.9%—the sharpest decline in history, at that time. The only worse event happened a couple of years ago in the post-pandemic period due to market saturation, and the industry is still reeling from that near 15% drop. Moreover, it's happening when the market should be booming; normally, 2026 would be a major growth year due to the Windows 10 support cliff, as well as the AI PC wave.

Instead, IDC's conclusion is cautious but unmistakable: what began as an AI infrastructure boom is now reshaping consumer hardware markets in unintended ways. Memory scarcity is tightening supply, inflating prices, and forcing vendors to rethink product roadmaps at exactly the wrong moment. 2025 was already tough for the PC market, with GPUs scarce on the ground and little else to convince buyers to upgrade their perfectly serviceable machines.

IT market research and data analytics firm IDC released an update on the global memory crisis, offering new forecast numbers as the more companies hike memory chip prices. Although IDC said that it still stands by its original forecast that the PC market will contract by 2.4% in 2026, it also added two additional scenarios based on the evolving situation with the worldwide NAND and DRAM supply. The moderate scenario sees a 4.9% decline in the sales, while a more pessimistic forecast shows a larger 8.9% contraction of the PC market. This downward trend would be accompanied by a jump in overall acquisition costs, with moderate forecasts hinting at a 4% to 6% increase in prices, but pessimistic ones suggesting price rises of up to 8%.

Several companies — from memory makers to PC manufacturers and system integrators — have already announced that they will increase pre-built PC costs. Dell and Lenovo, some of the biggest makers of enterprise and consumer PCs, have said that they will adjust their prices by as much as 15%. Other manufacturers have stopped selling standalone RAM, with Framework doing this to ward off scalpers, while some pre-built manufacturers have given customers the option to buy a system without memory modules.

Would you buy a prebuilt without memory modules today?

This memory meltdown is caused by the sudden burgeoning demand for HBM used in AI data centers. Since the wafers for these high-performance chips use the same production lines as consumer memory, many manufacturers chose to allocate more production capacity to these chips, simply as they’re far more lucrative. And while they could expand production capacity or even build new fabs to make more chips for either data centers or consumers, they chose not to as they’re hedging their bets against an AI bubble. After all, building a new production facility will cost billions of dollars and will take years to finish, by which time the demand could no longer be there.

So, whether you plan to upgrade your system memory or storage, buy a new laptop, or even build a completely new system on your own, a Kingston rep recommended that you do it sooner rather than wait for lower prices. RAM and SSD prices are expected to continue rising in 2026, that’s why you shouldn’t hold off on that purchase, but only if you really need it. If your system is still good for another couple of years, consider holding off on that update until the situation stabilizes — but no one is sure until when the pricing apocalypse will last, with estimates ranging from six months to a decade.

The global server market experienced an unprecedented surge to nearly $100 billion in the first quarter as companies heavily invested in AI-related infrastructure, according to IDC, and 'accelerated' servers running Arm-based processors comprise one of the most rapidly growing categories, with Arm-powered server shipments rising 70% this year.

It appears that the vast majority of these Arm-powered machines are Nvidia's GB200 NVL72 rack-scale solution, based on the Grace Blackwell platform, which features an Nvidia Grace CPU and eight B200 AI GPUs per server.

Overall server purchases totaled $95.2 billion in Q1 2025, reflecting a 134.1% increase from the same period in 2024. This figure represents the fastest quarterly growth ever observed in this market, according to IDC. The widespread deployment of GPU-accelerated AI servers is fueling momentum, including those used by hyperscalers, with Nvidia's Arm-based Grace CPUs contributing to a 70% year-over-year increase in Arm server shipments this year.

Based on this surge, the annual projection for the 2025 server market was revised upward to $366 billion, representing a 44.6% increase compared to the previous year.

Spending on servers based on the x86 instruction set architecture (ISA) is expected to grow 39.9% for the year, reaching $283.9 billion. Meanwhile, systems using Arm and other non-x86 CPUs will gain even more, at a rate of 63.7% year-over-year, with projected sales of $82 billion in 2025.

Sales of GPU-based AI and HPC servers are projected to grow by 46.7% in 2025, accounting for nearly half of all spending in this segment. This trend has been amplified by the need for massive computing power to support new AI workloads and training pipelines.

Arm-based platforms are also gaining momentum, with shipment volumes projected to rise 70.0% compared to 2024. By the end of 2025, Arm systems are expected to represent approximately 21.1% of total server units shipped worldwide. This is considerably lower than Arm's long-term expectations of 50% market penetration. However, 21.1% is still a huge slice of the pie, considering that the lion's share of these CPUs are Nvidia's Grace processors.

The market is projected to keep growing

Spending on servers is expected to continue rising sharply in the coming years, starting at around $249 billion in 2024 and reaching $588 billion by 2029. The largest category in this period is Accelerated x86 (AI servers based on GPUs or AI accelerators with AMD or Intel processors), which is projected to grow from $112 billion in 2024 to $324 billion by 2029.

However, Accelerated Arm machines are also set to expand rapidly, increasing more than threefold from $32 billion to $103 billion by 2029, reflecting a rather rapid adoption of Arm-based systems for AI and cloud workloads.

Keep in mind that Accelerated Arm machines released between 2027 and 2028 can use not only Nvidia's processors, but also CPU designs from the 'NVLink Fusion camp,' such as those from Fujitsu, Marvell, MediaTek, and Qualcomm. Of course, it remains to be seen whether they will be able to capture significant market share.

Accelerated Other Non-x86 (including FPGA and ASIC servers) is also set to grow, albeit modestly, reaching $31 billion in 2029. Demand for Accelerated AI servers will be driven by more advanced LLMs and LRMs, in addition to the speculation that artificial general intelligence (AGI) is possible. AGI would require even more compute performance than today's AI technologies, according to IDC.

"The Stargate project re-announcement promised to invest up to $500 billion in AI infrastructure to help create artificial general intelligence (AGI)," said Kuba Stolarski, research vice president, Worldwide Infrastructure Research.

"Shortly thereafter, the release of DeepSeek's R1 reasoning model caused concerns about the necessity of investing in so much infrastructure. [DeepSeek] R1 needed more infrastructure than was reported, and the evolution from simple chatbots to reasoning models to agentic AI will require several orders of magnitude more processing capacity, especially for inferencing. Improvements in the efficiency of model creation were expected and, in fact, a goal in the industry. Efficient models will use fewer resources, and therefore may scale better in multi-user environments, enabling high-level reasoning and possibly eventually leading to AGI."

Meanwhile, spending on traditional servers (Non-Accelerated x86) will continue to rise steadily from $91 billion to $130 billion, but it'll become a smaller share of the overall market value. Unfortunately, IDC doesn't make forecasts about the adoption of general-purpose servers based on Arm CPUs, such as those from Arm itself, custom CPUs from hyperscale CSPs, or companies like Ampere Computing.

The U.S. leads the way

Market research and tech analyst firm IDC reckons that global PC sales will reach 274 million units in 2025. Thus, we should be looking at a 4.1% uplift in PC sales compared to 2024, indicates IDC. This appears to be good news for the PC industry, and factors including a race to beat U.S. tariffs and Windows 11 are behind the upward revision, say the firm’s analysts.

We last wrote about IDC global PC shipment forecasts back in February, when the impact of U.S. tariffs and the cool reception to AI PCs were expected to be headwinds affecting the industry. At that time, IDC expected global PC sales to be up 3.7% (at 273 million units) compared to 2024 (262.7 million units were shipped last year).

IDC has adjusted its previous estimates upward after it observed that PC makers shipped larger-than-usual volumes to the U.S. ahead of tariff deadlines. “The 90 day pause and tariffs exemption applied to personal computers, combined with a definite level of uncertainty on what will happen after the 90 day pause, is motivating PC manufacturers to seize the moment and ship larger than anticipated volumes in the US,” explained Jean Philippe Bouchard, research VP with IDC's Worldwide PC Trackers.

That artificial boost to U.S. shipments might easily be cancelled out by an oversupply of PCs in subsequent months, with the PC maker's actions accentuating the ebb and flow of supply and demand.

Other negative sentiment regarding expected PC shipment volumes stems from things like worsening macroeconomic conditions, upward pressure on pricing, and degraded consumer sentiment, noted Bouchard.

Clock ticking on Windows 10

IDC has revised its expectations for the personal computer market, lowering its forecast for 2025 and beyond due to U.S. tariffs on China-made goods and reduced consumer demand. But the PC industry has tailwinds as well as headwinds, so sales of PCs will increase in 2025 compared to the prior year.

Global PC shipments are now projected to reach 273 million next year, growing 3.7% from 2024 — slightly less than previously estimated by IDC. PC growth is expected to slow further, remaining under 1% annually through 2029. On the other hand, workstations are expected to maintain steady demand. PC makers pin their hopes on AI-powered PCs, yet the category has struggled to gain traction so far; IDC expects to see stronger adoption by 2026 as the technology matures and the ecosystem around them improves.

Sales of tablets are projected to struggle, with shipments predicted to drop 0.8% in 2025 to 143.3 million and gradually decline to 141.6 million by the end of the decade mainly due to market saturation among consumers.

"Price hikes stemming from tariffs in the US combined with subdued demand are leading to a negative impact within the largest market for PCs," said Jitesh Ubrani, research manager with IDC's Worldwide Mobile Device Trackers. "However, the weakness amongst consumer demand is universal as macro issues persist. There are still some silver linings though: workstation volume should remain healthy, along with near-term tablet demand in China boosted by consumer subsidies."

Consumer PC and tablets shipments are set to rise slightly by 0.2% in 2025, totaling 236.7 million units, but demand remains weak due to price hikes in the U.S. linked to tariffs as well as economic conditions in the rest of the world.

Meanwhile, the commercial sector — excluding education — will expand to 138 million PC and tablet units, or by 4.3%, in 2025 (possibly driven by the end of Windows 10 support) and maintain modest long-term growth at 0.8% annually. IDC notes that while the transition to Windows 11 is influencing purchasing decisions, budget constraints may push some businesses to rely on extended Windows 10 support instead.

The education segment, which will initially grow to 41.7 million PCs and tablets this year, or by 6.7%, is expected to shrink in the long run, with a compound annual decline of 2.1%.

Japan stands out as one of the few regions experiencing strong growth, as companies and smaller businesses are quickly replacing older systems before Windows 10 support ends in October. While expansion is set to slow after this surge, an ongoing education-sector initiative is expected to provide continued support for the market, according to IDC.

"In light of so many challenges around the world, Japan is a much-needed source of double-digit growth this year. Enterprises there as well as SMBs have been quickly replacing PCs in advance of the Windows 10 End Of Service in October," says Bryan Ma, vice president of Devices Research. "Growth rates naturally come down next year, but at least there is still a large education project to absorb some of the landing."

Sales of client PCs declined 13.9% year-over-year and totaled 259.5 million units in 2023, according to IDC. Gaming PC shipments experienced a similar downturn as the overall PC market, with a 13.2% year-over-year decrease to 44 million units, analysts from the same firm suggest, which means that gaming machines commanded 17% of the market. Sales of gaming monitors experienced a 20.3% increase, IDC claims.  But it appears that things may be rosier for gaming PCs in the near future.

It looks like shipments of gaming PCs and gaming hardware in general will get better in 2024 and onwards. IDC anticipates a slight 1% growth in gaming PC sales for 2024, mainly due to notebooks, and a 13.6% rise in gaming monitors driven by lower pricing and increased consumer interest, reaching 22.2 million units.  

The gaming monitor market has made a remarkable recovery from its decline in 2022. With average prices around $300, gaming monitors have become an essential and cost-effective component of the PC gaming ecosystem. Technological advancements, such as refresh rates exceeding 165 Hz, response times of 1 ms or less, and a shift towards higher resolutions (2560 x 1440 or greater), have contributed to their success. 

Meanwhile, shipments of premium GPUs are only expected to grow by about 3% year-over-year, according to IDC, which is slightly disappointing. This may be because neither AMD nor Nvidia are expected to ramp up production of their next-generation Radeon RX 8000 and GeForce RTX 50-series graphics cards in 2024 and are not expected to introduce their laptop versions this year, either.  

The resilience of gaming PCs is attributed to sustained demand and a robust premium market segment. Gaming monitors have recovered from a 2022 slump, with technological advancements and price reductions leading to higher adoption rates. Looking ahead, the gaming market is expected to expand further, with PC volume projected to hit 52 million units and monitors expected to reach 29.6 million units by 2028. 

While gaming monitor prices are expected to decrease annually, gaming PCs will see a rise in average selling prices, reaching $1,101, driven by the increasing popularity of notebooks and premium graphics cards. This trend indicates a growing market for high-end gaming hardware and a continued interest in enhanced gaming experiences. 

"Though the global economy continues to struggle, shipments for gaming PCs have been a bit more buoyant due to sustained demand," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers. "Most importantly, there's been an upward trend in pricing as the premium segment of the market has remained strong and will continue to see growth in the coming years thanks to dedicated and more affluent buyers who seem to be less impacted by the economy." 

The sustained demand for gaming PCs, despite economic uncertainties, can be credited to a dedicated and affluent consumer base that values high performance and premium experiences.

IDC has published the latest PC shipment statistics for Q4 2023, showing 67.1 million PCs shipped worldwide during the quarter. Despite large numbers, IDC states it "marginally surpassed expectations" since it reflects 2.7% fewer shipments compared to Q4 2022. 

The fourth quarter usually has many holidays and sales events across many countries. Good deals are typically available during this time, encouraging people to make a purchase. IDC calculated shipment data from over 90 countries which includes traditional PCs, desktops, notebooks and workstations. Based on this calculation, the following OEMs are leading:

Lenovo and HP are the only companies that gained more market share compared to Q3 2022, with Asus and Apple having the least amount of sales in the Top 5 category. Lenovo, HP and Dell are enjoying the majority of its OEM PC business amounting to a combined 59.6% of the total shipments during Q4 2023. 

Vendors are hoping for a strong 2024

In 2022, there was a 16.5% drop in annual shipments with current analysis showing a further 13.9% decline in 2023. Despite this, IDC is confident that 2024 will show much higher growth. IDC's vice president of Mobility and Consumer Device Trackers Ryan Reith said, "While the market was down again in 2023 in terms of shipments, there is a lot of positive momentum for PCs looking forward. While AI has captured everyone's attention, it shouldn't be overlooked that 2024 is expected to be a strong year for commercial PC refresh, and the advancements around gaming PCs continue to drive market excitement."

Gaming PCs aside, the new frontier is AI and expectations are high for AI PCs. There are upcoming machines with onboard NPUs, designed to improve the usefulness of AI. Microsoft is encouraging peripheral makers to integrate a dedicated Co-Pilot button on every new keyboard, Intel now have AI-friendly CPUs starting with Meteor Lake and Nvidia emphasized AI throughout the RTX 40 Super series presentation during CES 2024.

It would be hard to ascertain if Windows 11's Co-Pilot would be the driving force for user upgrades. OEMs typically sell new hardware with the latest Windows release and this means that Windows 11 and Co-Pilot could soon be running on more devices. 

International Data Corp. (IDC) reports that the global PC market experienced a downturn in the third quarter of 2023, with a 7.6% drop in shipments, totaling 68.2 million units. However, there is a silver lining as the market has seen a sequential rise in the past two quarters, hinting at a potential recovery. Notably, while most vendors faced challenges, HP showed growth.

The industry shipped 68.2 million desktops and laptops in Q3 2023, down from 73.8 million systems in the same quarter of the prior year. IDC highlighted that despite the overall market slump, the past two consecutive quarters have shown an uptick in PC shipments. This suggests that the market might be moving past its lowest point. Current inventory levels are approaching a healthy state, but the industry continues to grapple with pricing challenges in both the consumer and business sectors, the report claims.

"The PC industry is on a slow path to recovery as a device refresh cycle and end of support for Windows 10 will help drive sales in the second half of 2024 and beyond," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers. "In the meantime, the PC industry will unfortunately experience more pain," "The slowness in the industry is giving the supply chain an opportunity to explore procurement and production options outside China and this will likely remain a key issue going forward, second only to the advancement of AI within PCs."

Lenovo retained its position as the top global computer supplier in the third quarter of 2023, delivering 16 million devices. However, there was a 5% reduction in its sales compared to the previous year. Sequentially, Lenovo's shipments saw a rise of 1.8 million units. 

HP, ranking second globally in PC production, sold 13.5 million units of desktops and laptops in the same quarter. HP was the only company to increase sales of PCs by 6.4% year-over-year.

On the other hand, Dell, another major brand, reported its sixth straight quarter of reduced shipments. Dell secured the third spot with 10.3 million PCs, but its shipments declined by 14.3% YoY. This decline was primarily due to a decrease in enterprise PC demand, particularly in the U.S., a segment where Dell has a substantial footprint.

Among the top PC vendors, Apple faced the most significant significant setback. Apple, which retailed its No. 4 position, sold 7.2 million units, a 23.1% decline from the same quarter a year ago. This was attributed to production interruptions in late 2021 – early 2022 due to COVID-related issues and subsequent recovery in Q3 2022, which created an unfavorable year-over-year comparison. Apple commanded 10.6% of the PC market in Q3 2023, down from 12.7% in Q3 2022.

Asus shipped roughly 4.9 million computers in Q3, a 10.7% drop from the same quarter in 2022.

Experts from IDC believes that the addition of generative AI support to PCs could revive sales of desktops and laptops next year.

"Generative AI could be a watershed moment for the PC industry," said Linn Huang, research vice president, Devices & Displays at IDC. "While use cases have yet to be fully articulated, interest in the category is already strong. AI PCs promise organizations the ability to personalize the user experience at a deeper level all while being able to preserve data privacy and sovereignty. As more of these devices launch next year, we expect a significant boost to overall selling prices." 

HP is working with various electronic manufacturing service (EMS) providers to transfer a significant portion of its laptop production from China to Thailand, Mexico, and eventually Vietnam, reports Nikkei. This move is part of a broader trend among tech giants to diversify their manufacturing bases, with geopolitical tensions and rising costs in China being primary drivers.

As the world's second-largest PC manufacturer, following Lenovo, HP's decision to relocate its production is notable. The company plans to produce some of its commercial notebooks in Mexico, while consumer laptops will be manufactured in Thailand. Additionally, there's an upcoming shift to Vietnam slated for 2024. The production outside of China for this year is projected to be between a few million to 5 million units, a significant number considering HP's global shipment of 55.2 million PCs in 2023.

Thailand's existing infrastructure of PC suppliers is expected to ease HP's transition. Meanwhile, producing in Mexico aligns with HP's strategy to cater more efficiently to its primary market, North America. Despite these changes, HP remains committed to its operations in China, particularly in Chongqing, a city it helped develop into a major laptop production hub since 2008.

This strategic move by HP mirrors similar decisions by other tech behemoths. Dell, for instance, has been actively working to decrease its dependency on chips made in China. The company also set a target to manufacture at least 20% of their laptops in Vietnam this year. Similarly, Apple has also initiated MacBook production in Vietnam. 

The overarching reason for these shifts is multifaceted. While geopolitical concerns between the U.S. and China play a role, there are also practical considerations. China's escalating manufacturing costs, including challenges in labor recruitment and rising labor costs, are pushing companies to explore more cost-effective alternatives. The U.S. being a significant market for both HP and Dell further underscores the strategic importance of these moves.

Global PC shipments declined by 13.4% year-over-year in the second quarter of 2023, according to initial data from the International Data Corporation (IDC). This downturn marks the sixth straight quarter of shrinkage, spurred by macroeconomic factors, diminished demand across consumer and commercial sectors, and a shift in IT expenditure away from device acquisition. Still, IDC claims that the market outperformed the projected estimates for the quarter.

The industry shipped 61.6 million PCs in Q2 2023, down from 71.1 million computers in the same quarter a year ago. Lenovo shipped 14.2 million systems and remained the world's largest computer supplier in the second quarter of 2023, but its sales contracted by 18.4%. As a result, HP came close to besting leader by shipping 13.4 million desktops and laptops in Q2 2023. Dell came in third, with 10.3 million PCs, and Apple remained the world's fourth-largest PC supplier with 5.3 million machines sold during the quarter. Acer shipped approximately four million computers, based on data from IDC.

"The roller coaster of supply and demand the PC industry has faced over the past five years has been extremely challenging," said Ryan Reith, group vice president for IDC's Client Device Trackers. "Companies don't want to be caught with short supply like they were in 2020 and 2021, but at the same time, many seem hesitant to make the big bet on a market rebound. On the consumer side, we're seeing a return to pre-pandemic habits where computing needs are shared across multiple devices, and we firmly believe the consumer wallet will favor smartphones over the PC. On the commercial side, workforce reductions (for many big companies) as well as the introduction of generative AI only add more confusion as to where to place an already reduced budget."

Except for Apple and HP, all large PC makers suffered double-digit decreases during the quarter. Apple enjoyed a favorable year-over-year growth due to supply constraints in Q2 2022, as a result of COVID-related supply chain disruptions. HP, meanwhile, has dealt with an excess of inventory in the previous year and is now nearing normalized inventory levels, resulting in a better growth rate amid this slowdown, according to IDC.

Still, persistently weak demand has led to inventory levels remaining high for an extended period, affecting both completed systems at the channel level and the supply chain.

"Elevated channel and component inventory are once again dragging down the market," said Jitesh Ubrani, research manager for IDC's Mobility and Consumer Device Trackers. "And despite these issues slowly easing, many component suppliers continue to offer reduced pricing in an effort to clear their inventory though PC makers and channels are still cautious about new systems due to the reduced demand."

IDC reports that diminished demand, surplus stock, and a declining macroeconomic environment all played a role in the significant decline in traditional PC shipments in the first quarter of 2023. Shipments of PCs declined by 29% year-over-year, hurting all PC makers. Yet surprisingly, Apple was hurt the most. 

Global PC shipments totaled 56.9 million, a 29% decrease compared to the same period in 2022, based on initial data from IDC. Analysts believe these results signify an end to the COVID-induced demand period and a temporary revert to pre-COVID trends. Shipments in Q1 2023 were substantially lower than the 59.2 million and 60.6 million units in Q1 2019 and Q1 2018, respectively. 

While all PC makers lost sales in the first quarter, Apple was perhaps the biggest loser, with a 40.5% year-over-year decline. Apple's primary focus in recent years has been on its iPhones and services businesses, which could have diverted resources and attention away from its traditional PC lineup. Indeed, the company launched its M2 Pro and M2 Max-based laptops in early Q1 (a slow season typically) and never updated its desktop lineup that still features its M1-series system-on-chips from 2020.

Even though Apple's M1 may still offer great performance-per-watt and single-thread performance (given its eight-wide decoding architecture), it is now three years old, and those customers who wanted to get an M1-based PC have already obtained one.  

As far as the whole PC market is concerned, the rankings did not change. The top five PC manufacturers by market share were Lenovo (23.9%), HP (21.5%), Dell (16.0%), Apple (7.5%), and Acer (6.4%).  

"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, research manager for IDC's Mobility and Consumer Device Trackers. "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." 

IDC says that the stagnation in growth and demand allows supply chains to adapt as PC OEMs investigate manufacturing alternatives outside of China. Concurrently, PC manufacturers are adjusting their strategies for the rest of the year and placing orders for Chromebooks in anticipation of increased licensing fees later in the year. Nevertheless, short-term PC shipments will probably struggle, with a resurgence expected by year-end due to global economic improvements and users considering upgrading to Windows 11. 

IDC notes other factors in the PC market's stagnation. Analysts believe that the stall allows supply chains to adapt as factories investigate manufacturing alternatives outside of China and adjust their strategies for the rest of the year.  

Nevertheless, short-term PC shipments will probably struggle, with a resurgence expected by year-end due to global economic improvements and users considering upgrading to Windows 11, according to IDC.

"By 2024, the aging installed base will be due for a refresh," stated Linn Huang, research vice president, Devices and Displays at IDC. "If the economy is on an upward trajectory by then, we anticipate a significant market boost as consumers upgrade, schools replace worn Chromebooks, and businesses transition to Windows 11. However, if economic stagnation persists in key markets into next year, recovery may be a slow process."

Most of the world's renowned PC brands left Russia after it invaded Ukraine in February 2022. Despite this, the country keeps getting PCs with Apple, Dell, and HP badges through grey market imports. Foreign-controlled brands commanded over 90% of the Russian PC market last year, with only 9% coming from local brands, according to CNews. Interestingly, CPU sales remained flat in 2022 even though neither AMD nor Intel officially shipped products to Russia, reports Kommersant. 

According to data from GS Group cited, Chinese brands remained the leading PC suppliers — including Lenovo and Huawei — in Russia in 2022, with about 38% market share. On the other hand, Taiwanese vendors — such as MSI, Acer, and Asus — captured a 35% share of the Russian PC market, whereas U.S.-originating PC OEMs (Apple, Dell, HP, etc.) controlled approximately 19% of the market in 2022, down from 36% in 2021. By contrast, Russian vendors supplied 9% of PCs sold in the country, up from 4% in 2021 and 3% in 2022. 

While the majority of well-known American, Chinese, and Taiwanese PC makers officially left Russia after it started the war against Ukraine, their products now flow to Russia through other countries, including Turkey and the UAE, to name a few. PCs carrying badges of domestic PC vendors are primarily produced in China as barebones, shipped to the country officially, and configured locally. While their popularity is increasing, this does not mean that the country is expanding its production of computers. Instead, some companies have started selling PCs under their own brands more aggressively.

GS Group does not disclose how many PCs were sold in Russia in 2022. Meanwhile, analysts from Marvel, a major distributor in the country, estimated that sales of PCs in the country reached 1.18 million units in the first half of the year. While it is hard to say how many units were supplied in the second half of the year since many brands left, it is reasonable to assume that the Russian PC TAM exceeded two million units in 2022. 

Interestingly, but based on the numbers from the Federal Customs Service, only about half of the CPUs powering those systems were supplied to the country legally. 

Kommersant reports that about 1.027 million CPUs were shipped to Russia in 2022. Some 782 thousand of them were made by Intel (up 9% year-over-year), 143 thousand carried the AMD trademark (down 2x compared to 2021), whereas another 102 thousand were developed by other vendors, which probably includes some Chinese names.

As China is easing its COVID-19 restrictions in a bid to reduce the impact on its economy and lessen social tensions, it may get an opposite effect as spread of the disease may cause labor shortage. A DigiTimes report on Tuesday indicated that notebook product launches in the first quarter could be affected by current labor shortages in the country.

After China lifted some of its pandemic restrictions, some of Chinese notebook supply chain companies saw infections affected up to 50% of their workers, which resulted in temporary shutdowns of production lines, the report says. This would naturally cause shipments delays, which will eventually affect availability of actual products, such as new laptops that use the latest CPUs and GPUs. The situation with COVID-19 infections and labor shortages is expected to get worse after the Lunar New Year when people get sick or extend their holidays.

Large notebook ODMs — Compal, Inventec, Quanta, and Wistron — have not yet experienced a shortage of components or shortage of workforce. Meanwhile, since large PC OEMs still have some stock to sell and do not expect overwhelming demand in Q1, they did not ask their production partners to increase output in the first quarter. This somewhat mitigates the impact of the COVID-19 infections and vacations. Meanwhile, large PC makers will still suffer from insufficient production capacity and the only question is how this affects the global PC market.

It remains to be seen whether large PC suppliers will opt to delay some of their product launches if their production partners cannot make enough hardware, but this is certainly a possibility. It will be interesting to see whether they decide to prioritize launches of expensive parts that do not sell in very high volumes, or focus on performance mainstream systems that are relatively high volume products.

It should be noted that that only about 10% to 15% of workers may actually be infected, the report says. Meanwhile, many employees call off work since they fear getting infected. This situation will continue until herd immunity in China is reached.

After Russia invaded Ukraine in late February, large hardware and software companies began to leave the country in a bid not to support the bloody war in any way. Now that the world's leading PC makers do not officially sell systems in Russia, many end users have to buy components to repair or upgrade their existing machines, according to media reports.

Sales of PC components for desktops and laptops increased by two – four times in the first nine months of 2021 in Russia compared to the same period a year ago, reports Cnews. Apparently, Russians are buying virtually all PC parts they can install themselves, including graphics cards, processors, memory, solid-state drives, hard drives, motherboards, and PC chassis, according to data from large retailers like M.Video-Eldorado, Ozon, and Wildberries.

While formal companies like Asus and Nvidia ceased shipping products to Russia earlier this year, their partners continued to send their motherboards and graphics cards to the nation, albeit indirectly, as they continued to capitalize on demand. Also, companies like Lenovo (and local grey box makers) have benefited from Dell's and HP's decision to leave the Russian market.

While the most components got more expensive than they used to be, some of them (e.g., graphics cards, SSDs) are a bit cheaper this year despite strong demand and even shortages. Moreover, as it turns out, some suppliers increased shipments of their parts to Russia.

Another essential factor about the Russian PC market is that the wait for getting official repairs on broken tech products has gotten significantly longer, which is perhaps one of the reasons why people now prefer to buy illegally imported components and install them themselves.

All-in-all, while many high-tech companies left Russia and no longer sell their products in the country, there are still those that capitalize on this market. Of course, it is hard to tell whether these companies can satisfy 100% of the country's needs in PCs and computer components, but it looks like one can still buy new hardware in the country, albeit at high prices.

Sales of PCs have been going down globally in the past couple of quarters due to inflation and increasing prices, geopolitical instability, and the end of the coronavirus rally. But in Russia, there were other reasons behind dropping PC sales: big PC brands and component vendors left the country, major brands left off, and everyone began to save. Yet, some companies thrive even amid a 20% year-over-year unit sales drop in 1H 2022. Lenovo seems to be among them.

Lenovo topped the list of PC suppliers with 95,000, up 3% units sold in 1H 2022 (up 3%, presumably year-over-year), after formally leaving the Russian market earlier this year, according to analysts from Marvel, a major distributor of PCs and hardware. It was followed by HP with 80,000 units, down 93%. The No.3 was a major Russia-based whitebox maker Aquarius with 61,100 units. The latter got a 215% sales increase, the company says. Traditionally the market was dominated by Dell and HP.

Sales of PCs in Russia in the first half of 2022 reached 1.18 million units, according to analysts from Marvel, a major distributor reports Vedomosti. That's down around 20% from the same time in 2021, based on the data from Marvel, a major distributor. Unfortunately, we only have this kind of data since Gartner and IDC ceased to monitor this market after Russia's invasion of Ukraine on February 24.

All the top PC makers — Lenovo, HP, Dell, Apple — left Russia after the nation started the war. Yet the numbers speak for themselves: HP's sales were halved in 1H 2022, but Lenovo's shipments were up. It is hard to tell whether Lenovo omitted any rules here, given that it officially left the country in May. So we are dealing with numbers from the first half of the year (no, IDC and Gartner do not cover Russia's PC market, so we do not have data outside of what Marvel kindly provides).

We have comments from a grey box PC supplier from Russia, who says that demand has at least doubled.

"As for Aquarius, our revenue increased by 215% [over three quarters of 2022]," said Vladimir Stepanov, the head of Aquarius, in an interview with Vedomosti.

Meanwhile, Marvel has hard times with the third quarter data, given consumer and business behavior, particularly in Russia, and global dynamics.

"It is quite difficult to presume results of the third quarter, as we see a combination of multidirectional factors," analysts from Marvel wrote to Vedomosti. "On the one hand, there is decreasing business activity, but on the other hand, there is an increase of [graphics cards availability at lower prices] due to a serious decrease [of interest from miners]. [Meanwhile there is a question] whether large customers managed to adapt to new realities."

To those paying attention to the market, reports about softening demand for PCs by consumers have almost become background music in recent months. So for many, the important questions are how significantly the market will contract in 2022 and when it is set to rebound. IDC on Friday said that the market will contract by 43.5 million units year-over-year in 2022, and will not return to growth for another year. 

IDC believes that unit shipments of PCs will total 305.3 million units in 2022, down 12.8% from 348.8 million units in 2021. Tablet sales will drop to 156.8 million units, or by 6.8% from the previous year. In total, shipments of personal computing devices (PCs and tablets, or PCDs) will decline to 462.1 million units, by 10.8%, in 2022 compared to 2021. Sales of PCDs will contract further by 2.3% in 2023 before rebounding in 2024. But while shipments of PCs and tablets are higher than they were in pre-pandemic years, they are not going to return to pre-pandemic peaks, even in 2025. 

IDC sees saturation of PCs in consumers' hands, a weaking global economy, and inflation as primary causes for the reduced outlook. 

"Long-term demand will be driven by a slow economic recovery combined with an enterprise hardware refresh as support for Windows 10 nears its end. Educational deployments and hybrid work are also expected to become a mainstay driving additional volumes," said Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers. 

One of the things that has been emphasized recently is that consumers are slowing their PC and tablet spending, whereas the enterprise market continues to buy new hardware. Indeed, IDC believes that consumers will buy 9.9% fewer PCDs this year, whereas enterprise purchases will be contracted by modest 1.6%. But apparently, consumers are not leading the pack here, as small businesses plan to reduce their procurements by 10.5% in 2022, whereas the public sector (government agencies, schools) will lower its consumption of PCDs by a whopping 20.3%. 

"With economic headwinds gaining speed, we expect worsening consumer sentiment to result in further consumer market contractions over the next six quarters," said Linn Huang, research vice president, Devices & Displays, IDC. "Economic recovery in time for the next major refresh cycle could propel some growth in the outer years of our forecast. Though volumes won't hit pandemic peaks, we expect the consumer market to drive towards more premium ends of the market." 

IDC's data is indirectly confirmed by Jon Peddie Research's report from earlier this week, which says that PC CPU shipments to PC makers declined by 33.7% year-over-year and sales of discrete desktop graphics cards decreased by 9.6% YoY in Q2 2022. Note that IDC counts PC boxes sold to distributors or end users, whereas JPR counts chips sold to hardware manufacturers. The fewer chips shipped to PC makers in Q2 2022, the fewer PCs will be sold in the next quarter or so.

PC shipments in 2022 will decline by 8.2% compared to the previous year, forecast market analysts at IDC. The firm's latest quarterly PC tracker report says this means, by the end of 2022, there will have been 321.2 million PCs shipped worldwide. If the market behaves as it expects, IDC says the PC industry will have a five-year compound annual growth rate (CAGR) of -0.6%. On the positive side of things, 2023 is predicted to see the return of PC shipments growth.

We know that the PC industry was thriving during the lockdowns in the west, with people stuck at home for both work and entertainment. This kind of demand has eased, with adults returning to offices and students returning to schools and colleges. IDC does indeed note that consumer and education markets are the worst affected, in drawing up its expectations of an 8.2% decline for PC shipments in the current year.

Continuing in a negative vein, other pandemic effects, war and inflation are currently slowing demand for PCs. China is still implementing strict lockdowns, which may boost demand for PCs in homes in that country, but the major effect is that supplies of some key components and device assembly are affected – as China is perhaps the most important player in PC component manufacturing and assembly. There are backlogs piling up for some components and finished devices due to pandemic-related Chinese factory issues. IDC expects these issues to be worked through by the end of 2022.

Turning to positives, PC shipments are still above pre-pandemic PC sales levels. 2023 should see a return to PC shipments growth. To attract more high-end consumer sales from upgraders, PC and laptop makers are working to provide devices with larger screens with higher resolutions and the faster CPUs and GPUs required to drive them smoothly. With discrete monitors and laptops there is a trend to make higher resolution panels with faster refresh rates, and wide color gamut technologies like micro LED, QDs, and OLED, available to penetrate the mainstream market.

IDC comments that commercial PC demand remains strong, and emerging markets are still keen to absorb large numbers of PCs. This has helped soften the consumer/education impacts seen as we reach the 2022 half way mark.

In IDC's figures and charts you will also see tablets data. In brief, the decline in tablet sales isn't forecast to be so drastic for the full year 2022 (6.2%). Nevertheless, as tablets are squeezed by thin and light laptops on one side and larger screen smartphones on the other, the segment's chances of recovery aren't as good.

Global PC shipments have dipped for the first time in years. Desktops and laptops enjoyed strong demand over the pandemic, with their broad potential for work, play and entertainment outshining rival platforms like consoles, tablets and smartphones. Now, as the world shuffles back to work in the "new normal", IDC reports that PC shipments dipped by 5.1% in Q1 2022. The market researchers aren't full of doom and gloom though, and see the potential for a recovery in momentum in the consumer and emerging market segments in the coming quarters.

The dip of 5.1% in Q1 2022 was worse than had been expected, comments IDC. However, it comes after two full years of superlative growth, and might be considered as to be the market pausing for breath rather than having hit a plateau or starting a decline. "The PC market is coming off two years of double-digit growth, so while the first quarter decline is a change in this momentum, it doesn't mean the industry is in a downward spiral," wrote IDC.

Another way to put Q1 in a brighter light is to look at the actual numbers of PCs shipped. IDC says that 80.5 million PCs shipped in Q1. This is a historically excellent figure. It is the seventh consecutive quarter of more than 80 million PCs shipped. Something that hasn't happened since 2012.

One must also not forget the state of the supply chain over the pandemic. With this in mind, one might consider maintaining more than 80 million PCs shipped per quarter, over an extended period a remarkable achievement.

Breaking down the figures and trends to try and see some deeper meaning, IDC commented that education and consumer PC sales slowed, but commercial sales remained strong. Moreover, the market researcher thinks that the consumer segment still has legs. We tend to agree, with great recent updates from CPU makers, and GPUs getting affordable again, we could see a lot more desktop and laptop PCs sold going through 2022, as people tire from holding off upgrading.

Overall, instead of expecting the double digit gains of the pandemic to change direction into a downturn, we should perhaps just see an inflection point followed by a more modest pace of growth.

Apple, Asus, and Dell Still Enjoyed Growth Year on Year 

It is interesting to check out how the big names in pre-build PCs and laptops fared over the most recent quarter / year. IDC comments that the top five remain the same, but we can see some big movements in growth over the year.

Asus did particularly well, but Dell and Apple also gained from Q1 2021 to 2022. One wonders whether Asus' grip on its supply chain and logistics were of particular benefit to its business, or whether it enjoyed strong growth off the back of its designs and pricing? You might ask the same questions of Dell and Apple, who were the only other companies to enjoy growth over the year.

Demand for personal computers began to grow in early 2020, and while the pace of growth has declined since then (to some degree because of shortages of certain components), the market is still expanding. IDC believes that shipments of desktops and laptops increased by 14.8% year-over-year in 2021. Apple has outstripped other PC suppliers and increased its shipments by 22.1%, but other PC makers also demonstrated significant increases in volume sales. 

The industry shipped 348.8 million PCs in 2021, up 14.8% over 2020. However, growth is clearly slowing as PC makers sold 92.653 million PCs in Q4 2021, an increase of around 1% compared to the same period in 2020. Analysts from IDC believe that shortages of many components (such as graphics cards or high-performance SSDs from some brands) affected the whole market, slowing growth.

"A challenging logistical environment, coupled with ongoing supply-side shortages, meant that the PC market could have been even larger than it was in 2021," according to Tom Mainelli, group vice president of IDC's Device and Consumer Research. "We closed the year with many buyers still waiting for their PC orders to ship. As we move through the first half of the year, we expect supply to remain constrained, especially with regards to the commercial segment where demand is the most robust." 

IDC's rival Canalys says that 2020 PC shipments totaled 'only' 341.053 million units, though its prediction for annual growth — 14.6% — is very close to that observed by IDC. Notebooks accounted for 80.6% of systems sold, whereas desktop PCs commanded 19.4% of the market, according to Canalys. The average selling price of a PC in 2021 was around $733, down slightly from $739 in 2020. 

All top 5 PC makers increased their unit shipments quite substantially throughout the year, but Apple was clearly ahead of the pack with a 22.1% year-over-year upturn in terms of units. Still, with 27.775 million systems sold in 2021 and a share of 8%, Apple is still considerably behind Dell, which controls 17% of the market. 

According to data by IDC, Lenovo retained its leading market position in 2021 with a 23.5% share and 81.935 million units shipped. HP, which sold 74.104 million PCs last year and controlled 21.2% of the market, only increased its unit shipments by a rather moderate 9.3% as the company focused on selling premium business/enterprise and gaming machines. It is noteworthy that Lenovo's and HP's sales in the fourth quarter last year declined from Q4 2020 for an unknown reason.

Dell supplied 59.303 million PCs last year, an impressive increase of 17.9% year-over-year, enough to comfortably sustain its position as the world's third-largest PC maker. Acer, the No.5 PC maker, also boosted its unit shipments by 16.5% annually to 23.906 million, but it could not catch up with Apple.  

The remaining PC makers slightly increased their share to 23.4% of PCs (from 23.1% of systems a year before) amid their cumulative unit sales growth of around 16.5%, which is perhaps a result of the fact that large PC vendors focused on business and enterprise customers in well-developed countries, whereas smaller players addressed individuals in developing markets.  

Over the past couple of years many users acquired additional PCs for work, learning, and leisure as in many cases their overall behavior changed and they now spend more time at home. But now that they have satisfied their basic needs, they will attempt to buy more premium systems to improve their experience, analysts from Canalys believe. 

"As PC vendors navigate an ever more complicated situation, consumer spending patterns are shifting," said Canalys Principal Analyst Rushabh Doshi. "We will see revenue growth in the industry from spending on premium PCs, monitors, accessories and other technology products that enable us to work from anywhere, collaborate around the world and remain ultra-productive. The importance of faster, better, more resilient and more secure PCs has never been greater, and the industry is willing to innovate and push the boundaries to keep this momentum going." 

PC shipments are at a decade high as individuals and businesses buy new systems for working and learning remotely, but according to market research firm IDC, PC sales will continue to grow over the next five years, albeit at a slower rate. However, according to analysts, supply constraints will continue for the foreseeable future. 

"The market has pulled past peak pandemic PC demand," said Jitesh Ubrani, research manager with IDC's Mobility and Consumer Device Trackers. 

The PC market is on track to reach 344.7 million units in 2021, a 13.5% growth rate compared to 2020, reports IDC. Demand for systems is strong across all segments: shipments of commercial PCs are robust, consumer PC sales are well above pre-pandemic levels, but the growth rate shows signs of slowing (perhaps because PC makers will prioritize producing high-margin PCs over consumer machines), whereas demand for gaming systems is at a record high, based on data from IDC.  

"With ongoing supply chain challenges we have seen OEMs prioritizing commercial demand in recent months," said Ryan Reith, program vice president with IDC's Mobility and Consumer Device Trackers. "More often than not the commercial dollars are larger and more guaranteed compared to the consumer and education segments. The recent slowdown in the consumer segment is expected to continue into 2022, but in the long run we expect the consumer PC market will have a five-year growth rate similar to the commercial segment." 

Overall, IDC predicts a five-year compound annual growth rate (CAGR) of 3.3% for PCs. Most of the growth is expected from notebooks, but demand for desktops will probably be strong, too. But that growth may be challenged by supply constraints, IDC admits. There are shortages of pretty much everything, starting from fairly expensive CPUs and extending down to power management ICs (PMICs) and display driver ICs (DDICs). These supply constraints will primarily impact the growth of consumer PCs. Price cuts and/or the introduction of premium features could spur demand for these systems, but with ongoing shortages, it is hard to expect them to get either. 

"Of the three market segments – commercial, consumer, and education – it is looking like commercial will be the only one to grow in 2022," said Reith. "Part of this is driven by supply, but also because it will take time for a consumer refresh cycle to happen following the wave of consumer buying that happened over the past two years. The education segment hasn't been able to get all the devices it needs, but on a broader scale there haven't been many cancelled orders. When supply catches up with demand, we expect to see an uplift in the education sector as well." 

Tablets have been in high demand recently, so shipments will increase by 4.3% year-over-year in 2021. Meanwhile, IDC forecasts that that tablet sales will drop in 2022 and 2023, probably because Apple introduced new models in 2020/2021, so most users won't upgrade any time soon. In addition, the category itself is challenged by both smartphones and notebooks, which is perhaps why Apple is evolving its iPadOS to be more usable for creative and productivity workloads.

IDC yesterday published a report on the health and expectations of the semiconductor market, noting an expected growth of 17.3% for the current calendar year. The forecast beats the historical growth of 10.3% registered for 2020, which saw overwhelming demand for semiconductors from almost all related industries due to the COVID-19 pandemic. 

The report indicates that foundry capacity throughout 2021 is allocated at nearly 100%, albeit issues remain from back-end manufacturing and materials procurement. By mid-2022, supply should return to normal, following production capacity expansions coming online. IDC expects this growth to be driven by mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and Wi-Fi access points. 

Another element of the report is cause for trouble however: IDC forecasts memory price increases as well, driven by increased demand and mounting capacities for consumer electronics (larger internal storage and RAM, alongside the transition from 4G phones to 5G and its related consumption increase are partly responsible).

IDC points out that most revenue growth will be led by 5G semiconductor revenues (a whopping 128% increase). Mobile phone semiconductors are expected to grow by 28.5%. Game consoles (34%), smart home (20%), and wearables (21%) will join the automotive semiconductor revenue increase (expected 22.8%) as shortages are mitigated towards the end of the year and throughout 2022. Notebook semiconductor revenues are expected to grow by a more constrained 11.8%, while X86 server semi revenues will increase by 24.6%.

All in all, IDC expects the overall semiconductor market to reach $600 billion by 2025, with an expected CAGR (Compound Annual Growth Rate) of 5.3%, higher than the historic 3-4% growth rate. However, an expectation of overcapacity by 2023 (as manufacturers finish bringing online capacity expansions initiated throughout the 2020-2022 period) could bring about a tipping point related to the supply and demand equation.

The PC market suffered from stagnation a few years ago,  but we have witnessed amazing growth for the sector during the pandemic as resources were poured into the technology improvement, which made PC demand blossom. According to today's report from International Data Corporation (IDC), PC demand will continue to grow throughout the year 2021.

As per the latest data coming from IDC's Worldwide Quarterly Personal Computing Device Tracker there are indications that the PC market will continue to grow this year. According to the tracker, worldwide PC shipments will grow 14% in 2021 as the market reaches 347 million units shipped. 

"Over the full 2021-2025 forecast period, Traditional PCs, inclusive of desktops, notebooks, and workstations, are expected to have a compound annual growth rate (CAGR) of 3.2% while tablets are expected to decline 1.5%. Despite short-term supply constraints related to panels and ICs, notebook PCs will remain the main driver of future PC growth." - says the report. It notes that the main growth driver is the laptop market, which is in highest demand ever

According to IDC, the pre-pandemic measurements and estimations in November 2019 for PC demand were low, and the company expected PCs to sell 373 million units by 2023. Today, IDC expects that there will be about half a billion personal computing devices shipped in that year, alone. 

As IDC trackers are estimating for a few years in advance, the demand is expected to wind down in 2025 as general personal budgets will be redirected toward travel and other activities that were previously restricted by the pandemic. However, not everything looks gray — even when demand slows down, the available market is still going to be much greater than what it would be if the pandemic didn't happen.

Global PC shipments have seen massive growth throughout the COVID-19 pandemic. Today, we have the latest compiled information from International Data Corporation (IDC), with the company updating its Worldwide Quarterly Personal Computing Device Tracker for Q2 of 2021.

According to IDC, the demand for PCs has remained quite strong. Global shipments of notebooks, traditional desktops, and workstations have reached 83.6 million units in Q2 of 2021 alone. That represents a 13.2% increase from the same period in 2020. It is noted that the component shortage that hit the notebook segment lead the desktops to outpace notebooks in the number of sold units.

Even though the numbers of PC sales are still growing, statistics indicate that there could be signs of market cooling off. In Q1 of 2021, PC shipments experienced 55.9% growth compared to the same period of 2020. In Q4 of 2020, shipments grew 25.8% compared to the same period in 2019. While this outcome produces mixed signals, it also indicates that we may experience lower demand for PCs as more quarters go by.

As noted by  IDC’s Devices and Displays Group senior research analyst Neha Mahajan, we see that "The market faces mixed signals as far as demand is concerned. With businesses opening back up, demand potential in the commercial segment appears promising. However, there are also early indicators of consumer demand slowing down as people shift spending priorities after nearly a year of aggressive PC buying."

As far as individual companies, there are just a few that led the way of shipping millions of units single-handedly. At the top of the stack, there is Lenovo that holds 23.9% of the Q2 2021 market. Closely following is HP with its 22.2% share, after which comes Dell with a 16.7% grab. For 4th and 5th place, we see Apple and Acer tagging along with their 7.4% and 7.3% share, respectively. Below you can take a look at the table designed by IDC, showing the growth of shipments by each company, displayed in thousands of units.

It is important to note that IDC declares a tie when the difference between the two companies is just 0.1%. Additionally, the company reported that the growth of smaller vendors has helped PC shipments a lot, as they managed to offer unique designs for niche applications. Thus, they managed to satisfy all the segments in need of a PC.

Demand for PCs in the second quarter continues to be high amid chip shortages, which constrains manufacturers' ability to fulfill orders. A new report from Taiwan indicates that some vendors are projected to see shipments fall short of orders by 30% to 50% in Q2 2021. 

According to an IDC report, sales of PCs increased by over 55% year-over-year in the first quarter of 2021. Large PC makers have increased their unit sales by well over 50% (with Apple's shipments increasing by 111.5% YoY). In contrast, smaller makers enjoyed 'only' 50% growth, which is explainable as it is easier for large PC makers to procure components that are in short supply due to their volume of scale and buying power. 

But apparently, demand for PCs is so high that some notebook makers expect their shipments to fall short of orders by 30% to 50% in the second quarter, according to DigiTimes. Manufacturers naturally prioritize higher-end models, so supplies of inexpensive machines, such as entry-level Chromebooks for education customers, will remain constrained in the second quarter. Meanwhile, 43.8% of Japan's GIGA School project shipments were Chrome OS-based, followed by Apple MacOS and Microsoft Windows-powered machines. 

Taiwanese PC makers now expect supply constraints to persist in the second half of the year as the PC industry has to compete against cars and smartphone producers that also need chips and other components, which will naturally increase the prices of computers. 

Interestingly, to secure the supply of hard-to-find components, some vendors even acquire stakes in their suppliers. For example, Acer Group recently invested $53 million in display driver IC supplier FocalTech Systems and now holds a 3.58% stake in the company. 

News stories about chip shortages for various applications have become so common in the past few months that they now sound like background noise. It's no secret that demand for PCs and other electronics is high, but sales of personal computers have actually beaten all the expectations in the first quarter as they increased by 55% year-over-year, according to the latest data from IDC. Apple seems to be the biggest winner here since its shipments have more than doubled.

The industry shipped as many as 83.981 million PCs in Q1 2021, up 55.2% from the same quarter a year ago and a modest 8% decline from Q4 2020, which is a seasonally strong quarter. In fact, most Top 5 PC suppliers demonstrated over 50% year-over-year PC unit sales growth, an indication that they were eating the lunch of smaller players, which is not particularly surprising as they could procure more components and ship more machines.

Lenovo remained the market leader, selling 20.4 million computers and controlling 24.3% of the market. HP came in second with 19.237 million systems shipped and 22.9% market share. Dell landed in third with 12.946 million PCs and a 15.4% share.

Apple was in the distant fourth place, shipping 6.692 million Macs and owning 8% of the market. But Apple's sales were up a whopping 111.5% year-over-year, probably one of the biggest YoY jumps that the company has ever seen. Acer was the No. 5 PC maker in Q1 2021 with 5.837 machines sold and 7% of the market. 

"Unfulfilled demand from the past year has carried forward into the first quarter, and additional demand brought on by the pandemic has also continued to drive volume," said Jitesh Ubrani, research manager for IDC's Mobile Device Trackers. "However, the market continues to struggle with setbacks including component shortages and logistics issues, each of which has contributed to an increase in average selling prices." 

Demand for PCs began to skyrocket in Q1 2020 as many countries went into lockdown, sending hundreds of millions of employees and students home. All of these people had to buy new PCs for their remote work and learning, yet the supply chain was not ready, so shipments of PCs dropped year-over-year in Q1 2020 to 54.1 million units (from 59 million in Q1 2019), creating a large number of backorders. This differed demand has been affecting the supply chain since then, and shortages are expected to persist for quarters to come. But that decline in Q1 2020 created a low base effect for Q1 2021, which is why we can observe such tangible growth.  

"There is no question when entering 2021 the backlog for PCs was extensive across business, consumer, and education," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "The ongoing shortages in the semiconductor space only further prolong the ability for vendors to refill inventory and fulfill orders to customers. We believe a fundamental shift has occurred around the PC, which will result in a more positive outlook for years to follow. All three segments — business, education, and consumer — are experiencing demand that we didn't expect to happen regardless of many countries beginning their ‘opening up’ process. Component shortages will likely be a topic of conversation for the majority of 2021, but the more important question should be what PC demand will look like in 2-3 years."

Driven by the needs of working from home and remote education, shipments of personal computers and tablets surged significantly this year. This month sales of PCs promise to increase well beyond expectations as demand for systems for home working and learning will be amplified by the holiday spending. Analysts from IDC expect demand for PCs to remain high next year, which might mean that shortages of certain components may persist. 

IDC projects that sales of desktops and laptops will increase 18.2% year over year in the fourth quarter of 2020, whereas shipments of mobile devices will surge 26.4% YoY in Q4 2020. In general, sales of PCs this year will increase 11.2% compared to 2019 mainly because of work from home and remote education needs. In fact, shipments of all devices that could be used for work, learning, and/or entertainment are up this year. 

"The momentum in the PC market has been impressive to say the least," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "Consumers seem to be buying all ranges of notebook PCs from low-end entry level systems to high-end gaming machines. It is important to note that all of this is happening at a time when other device categories like smartphones, PC monitors, TVs, and gaming consoles are also growing. A clear shift in consumer spend has happened." 

It is no secret that it is hard to get AMD's newest CPUs and GPUs, Nvidia's GeForce RTX 30-series graphics cards as well as the latest game consoles from Microsoft and Sony. Meanwhile, it is unreasonable for semiconductor and electronics manufacturers to expand their manufacturing capacities significantly just to meet existing demand as soon as possible and then depreciate additional production tools for years. As a result, there are huge backlogs both in consumer and education segments will go into 2021. 

"Earlier this year it seemed like this would be a six-month bump to the industry, but as we look at the supply chain pipeline into 2021, it's clear that the surge has more legs," said Reith. "The education backlog remains extensive and many school districts around the world are doing everything they can to secure inventory." 

Demand for desktops and notebooks will remain high next year as well. In fact, IDC predicts that shipments of PCs will rise 1.4% in 2021. 

"Not only do we expect more PCs to ship this year and next, but the fundamental shift in everyone's workflow is also expected to have a lasting impact on the PC market in 2022 and beyond," said Jitesh Ubrani, research manager for IDC's Worldwide Mobile Device Trackers. "Longer term forecasts for PC shipments and average selling prices have increased as households inch towards one PC per person while buying PCs further up the stack." 

One thing that is noteworthy about increasing shipments of PCs is that sales of notebooks are growing, whereas sales of desktops are declining even when the whole market is up. IDC projects that 291.3 million of computers will be shipped this year, of which 215.8 million will be laptops and 75.5 million will be desktops.  

But after WFH, distance learning, and home entertainment needs will be satisfied, sales of PCs will drop in 2022, based on IDC's projections. However, starting from 2023 they will return to slow growth. 

COVID-19 is reportedly wreaking havoc on the technology industry. IDC's latest predictions shared Thursday put some numbers on how the coronavirus outbreak may hurt the PC market this year with its Worldwide Quarterly Personal Computing Device Tracker, which covers desktops, laptops, workstations and tablets.

"We have already forgone nearly a month of production given the two-week extension to the Lunar New Year break, and we expect the road to recovery for China's supply chain to be long with a slow trickle of labor back to factories in impacted provinces until May when the weather improves," Linn Huang, research VP, Devices & Displays, IDC, said in a statement. "Many critical components, such as panels, touch sensors and printed circuit boards, come out of these impacted regions, which will cause a supply crunch heading into Q2."

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IDC's figures detail forecasts that were made before the coronavirus hit, as well as after, as you can see in the table above. Before the outbreak, the analyst expected the shipments of traditional PCs to decline 6.8% year-over-year in Q2; now it expects it to fall 10.3%. IDC also attributed the decline to the transition from Windows 7 to Windows 10, now that Windows 7 has reached end-of-life. 

IDC also said it's expecting an 8.2% drop in shipments during Q1 2020, followed by a 12.7% decline in Q2 "as the existing inventory of components and finished goods from the first quarter will have been depleted by the second quarter."

IDC predicted that the second half of 2020 will also show a market decline but better growth than the first half.  

Gartner and IDC both said yesterday that global PC shipments rose in the fourth quarter of 2019. They didn't agree on exactly how much the market grew--Gartner said it saw a 2.3% increase in shipments; IDC said it saw a 4.8% increase--but they did attribute that growth to the same factor. It turns out that Microsoft's decision to finally stop supporting Windows 7 was the push the PC market needed last year.

For anyone who missed the memo: Microsoft will officially stop supporting Windows 7 on January 14. The company has repeatedly warned people who continue to use the operating system of this change, and advised them to upgrade to Windows 10. Many of those people, according to Gartner and IDC, are upgrading their hardware as a result.

Here's what Gartner senior principal analyst Mikako Kitagawa said about the shift:

“The PC market experienced growth for the first time since 2011, driven by vibrant business demand for Windows 10 upgrades, particularly in the U.S., EMEA and Japan. We expect this growth to continue through this year even after Windows 7 support comes to an end this month, as many businesses in emerging regions such as China, Eurasia and the emerging Asia/Pacific have not yet upgraded.”

That growth wasn't particularly high. Gartner said that PC shipments rose just 0.6% year-over-year between 2018 and 2019. But even that minor increase in shipments was worth celebrating, because it's been eight years since the market grew at all.

Unfortunately neither company expects this growth to last. Companies will probably be less keen to upgrade their systems in the new fiscal year, and without that bump from Windows 7's demise, other factors will play a more important role. That means Intel's ongoing CPU shortage, the trade war between the U.S. and China and other negative aspects of the market could quickly reverse the market's growth from 2019.

IDC Worldwide Mobile Device Trackers research manager Jitesh Ubrani explained:

"Despite the positivity surrounding 2019, the next twelve to eighteen months will be challenging for traditional PCs as the majority of Windows 10 upgrades will be in the rearview mirror and lingering concerns around component shortages and trade negotiations get ironed out. Although new technologies such as 5G and dual- and folding-screen devices along with an uptake in gaming PCs will provide an uplift, these will take some time to coalesce."

Gartner and IDC also agreed on the top four PC vendors: Lenovo, HP, Dell and Apple. The first three grew year-over-year in 2019, but Apple and other top vendors shipped fewer units compared to 2018, despite the market's overall growth. That difference was at least partly attributed to the big three's ability to secure enough CPUs to meet demand for their PCs; other companies didn't fare as well.

IDC said Monday that global shipments of gaming PCs and gaming monitors rose 16.5% year-over-year in the second quarter of 2019. The research firm attributed that increase to various factors, but perhaps the most important was the increased availability of Intel CPUs, which made it easier for manufacturers to satisfy demand. Now those companies will simply have to contend with the gaming market's usual lack of predictability.

A note on what IDC actually quantified: the firm said that it a gaming PC features graphics cards from "the mid-range and high-end offerings from Nvidia and AMD" but not professional GPUs  such as the Quadro and Radeon Pro. A gaming monitor is any product with a refresh rate of 100 Hz or higher. Those definitions allow it to focus on the gaming market without having to tally up all of the devices on which someone could technically play a game if they wanted.

IDC said that gaming laptop sales rose 12.7% year-over-year, and it attributed some of that growth to "the launch of models that support ray tracing along a wide spectrum of price points." It expects the category "to still take the lion's share of volume and revenue with the form factor seeing strong innovations in thinner dimensions and performance." Those improvements could narrow the performance gap between gaming desktops and laptops.

The research firm said that gaming desktop sales rose 3.3% in Q2 2019 after struggling for several quarters in a row. That growth was attributed to "an improved supply of Intel CPUs, an easing of previously excessive GPU inventory and a revamped pricing structure for ray tracing-capable GPUs." IDC also said that fears of price hikes resulting from the U.S. and China trade war also led to an increase of device shipments in the U.S.

Gaming monitor sales increased even more than gaming PCs in Q2, with IDC's announcement stating "demand for gaming monitors remained strong, posting a record high quarter in volume and continuing to outpace the other two categories in terms of year-over-year growth." That hardly comes as a surprise. As manufacturers continue to release increasingly affordable 240 Hz monitors, the 100 Hz refresh rate IDC uses to define the category becomes more attainable too.

"Beyond the current quarter, IDC anticipates the market for gaming desktops, notebooks and monitors will grow 9.6% for the full year of 2019, reaching 42.8 million units," the research firm said. "Compared to the previous forecast, IDC has increased its short-term outlook but lowered the long-term forecast for desktop and notebooks while increasing the outlook for gaming monitors."

Usually the only thing analysts can agree on is the importance of their jobs. Otherwise, they differ in how they collect data, how they interpret that information, and what conclusions they draw as part of their processes. Now we've found another exception to what we're calling the Law of Analytical Disagreement: Gartner and IDC both said the ongoing shortage of Intel processors is to blame for a global decline in PC shipments.

Both research firms released their findings on April 10. There are still a few differences between their findings: Gartner thinks PC shipments fell by 4.6 percent, IDC thinks they fell 3 percent; Gartner has Lenovo as the market leader, IDC has HP, and Gartner focused more on Chromebook growth than IDC. Yet their findings are otherwise similar, and they even landed on the same number of units shipped this quarter, at 58.5 million.

Gartner and IDC both agreed that Intel's CPU shortage affected the low end of the market and forced manufacturers to look elsewhere. There's a reason why AMD has finally established a foothold in the Chromebook market, for example, and why companies focused more on business-ready products than their consumer counterparts. There simply aren't enough Intel processors to support the low end of the PC market right now.

“The supply constraints affected the vendor competitive landscape as leading vendors had better allocation of chips and also began sourcing alternative CPUs from AMD,” Gartner senior principal analyst Mikako Kitagawa said. “The top three vendors worldwide were still able to increase shipments despite the supply constraint by focusing on their high-end products and taking share from small vendors that struggled to secure CPUs."

Kitagawa also said that shift in focus away from consumer products and towards high-end devices could benefit the big three (HP, Lenovo, and Dell) manufacturers. Component prices have dropped, but that doesn't mean the price of these enterprise products has declined. That could lead to improved profit margins, and because other companies can't source CPUs, the shift in focus doesn't hurt these companies' consumer offerings.

IDC also noted that more manufacturers have turned to AMD for their CPU needs, and said the U.S. market, in particular, was affected by the processor shortage. "Intel CPU shortages continued to pose a production bottleneck for PC makers," the research firm said, "making it difficult to meet new demand especially from the business side as the Windows 10 migration continues." Dwindling consumer demand is also an issue.

These findings support what we've already suspected: that Intel is far from the only company affected by its processor shortage and that manufacturers are turning to AMD for their CPUs rather than simply waiting for Intel to ramp up production. Finding evidence of those claims from one research firm would be validating; finding it from two firms that don't agree on pretty much anything is even more so.

Research firm IDC has predicted that Intel’s ongoing CPU shortage, muffled interest in gaming PCs with old GPUs inside and the holiday-centric nature of tablet buying would all lead to a global decline in the personal computing devices (PCD) market in 2019.

In a report announced March 7, the research group said that it expects the drop in PC shipments in 2018 to continue this year. It did foresee a few bright spots— detachable tablets and business laptops—but they're overshadowed by other factors with traditional PCs and tablets.

The IDC explained in its forecast for 2019: “Though easing up, the CPU shortage may hamper some entry-level device volume. Gaming PCs, whose momentum had been building for much of 2018, will also face some short-term challenges as the market works through older GPU inventory and the gaming ecosystem warms up to Nvidia's latest offerings.”

Intel and Nvidia’s struggles have been well documented. The former hasn't been able to keep up with demand for its CPUs, which has reduced sales of other parts because it’s leading many people to delay system upgrades. The latter made too many GPUs, and its new ones are too expensive for many people to afford.

Fitting, then, for the IDC to find potential in devices that don't rely on the latest from Intel and Nvidia. Detachable tablets, some of which are known as 2-in-1s and convertible laptops, sell because of their novelty rather than their performance. And businesses are mostly worried about Windows, according to the IDC.

“On a brighter note, although the commercial PC market is expected to see a small dip in 2019 compared to the previous year, the commercial notebook forecast has been raised for 2019. IDC expects a sizable amount of last-minute Windows 10 migration projects to be completed this year, especially among SMBs with an aging installed base," IDC said in its announcement. 

Overall, the company expects unit shipments would fall 3.2 percent in 2019 and continue to fall until 2023. 

Don't say goodbye to the PC just yet. While many have been predicting its slow demise in favor of phones and tablets, analyses from both Gartner and IDC show sales grew year over year in Q2 2018. IDC is more bullish, pointing to a 2.7 percent year-over-year increase as the strongest since Q1 2012's 4.2 percent rise, while Gartner points to a smaller 1.4 percent growth spurt, saying this is the first quarter of year-over-year growth since Q1 2012. 

IDC and Gartner both wrote in releases this week that businesses picked up the slack here, which offset continuing decline in the consumer space. IDC, however, also suggests that the market for Chromebooks, premium notebooks and gaming PCs helped, especially as GPU prices have started to drop.

"PC shipment growth in the second quarter of 2018 was driven by demand in the business market, which was offset by declining shipments in the consumer segment," said Mikako Kitagawa, principal analyst at Gartner. "In the consumer space, the fundamental market structure, due to changes on PC user behavior, still remains and continues to impact market growth." However, the analyst warns that when companies stop replacing machines to upgrade to Windows 10, growth may stall.

The two firms had slightly different measurements. Gartner's included desktops, laptops and "ultramobile premiums" like the Microsoft Surface, but didn't count Chromebooks or iPads. IDC counts desktops, notebooks and workstations, but not detachable 2-in-1s.

The big winners here were Lenovo, HP, Dell, Apple and Acer, all of which grew in sales year over year, according to both analyst firms. Additional companies, bundled in as "others," dropped in terms of growth.

There has been some increased competition in the desktop and laptop space that could continue to spur innovation. Both Intel and AMD are offering more power with renewed competition. As the cryptomining craze dies down, gaming PCs and workstations are also becoming more affordable again. That doesn't mean this growth spurt is here to stay, but it's good news for vendors looking at increased innovation and competition to keep pushing out new computers that sell widely.

The dreary PC market received yet another downgrade as the IDC restated its Worldwide Quarterly PC Tracker projections for the remainder of 2016. The restatement comes on the heels of a larger-than-expected decline in PC sales in the first quarter of this year. The bottom appears to be falling out of the PC market, which includes desktops and notebooks, at a more rapid pace than anticipated; it declined 12.5 percent year-over-year instead of the projected 11.3 percent in the first quarter.

The 12.5 percent drop is worrying, but the fact that this appears to be a sustained trend is even more troubling. The PC market declined nearly 11 percent in 2015, and the IDC projects a 7.3 percent fall in 2016. The IDC cited several factors that are contributing to the headwinds, including weak currencies, depressed commodity prices, political uncertainty and delayed projects. The tablet and phone markets continue to recede as well, so the continued slump is not coming at the hands of competing devices.

Surprisingly, the company also noted that free Windows 10 upgrades are a significant factor to the sluggish sales volume, as users do not have to buy a new PC to upgrade to the latest version of the operating system. Windows 10 is outpacing Windows 7 adoption by 145 percent, which represents the fastest adoption rate of an operating system in the company's history; upgrades topped 270 million users in the first eight months alone.

The free Windows 10 upgrade is certainly pushing the adoption rate uphill, but the fact that the operating system is lightweight enough to run well on many older PCs is not helping, either. The majority of modern operating systems and applications run well enough on older hardware for mainstream users to forgo hardware upgrades. Microsoft might be able to staunch the bleeding by curtailing the free upgrade program, but it has not announced any plans to that effect.

The desktop PC segment is experiencing the most drastic declines, while the notebook segment is subject to contractions that are more modest. In 2015, 162.6 million notebook PCs shipped, and the IDC predicts that 152.3 million notebooks will ship in 2016. The desktop PC segment accounted for 113.2 million units in 2015, but IDC projects that the segment will slide to a mere 103.3 million units in 2016, and to 99.2 million in 2017.

"The latest update reflects continuing pressure on PC shipments, but does not significantly change the factors driving the market," said Loren Loverde, Vice President, Worldwide Tracker Forecasting and PC research. "In addition, we have now had four consecutive quarters of double-digit volume declines. This type of prolonged slump is unprecedented, and lowers the bar for some improvement going forward. Unfortunately, the PC market still faces some persistent challenges, and for now, improvement continues to mean slower declines."

The IDC, like the majority of the analyst firms, does not expect growth to return to the PC market in the near or long term, instead predicting a -0.5 percent five-year CAGR (Compound Annual Growth Rate).

The PC industry is already roiling. Intel recently fired 11,000 employees in the midst of a vast restructuring initiative that is designed to reduce its reliance on the desktop PC market. The latest market restatements will likely spur another readjustment of the stock prices of the major PC vendors, along with the entire food chain of secondary suppliers, such as storage, GPU, CPU and DRAM vendors.

For now, the only hope for the PC market (and desktops in particular) is for the bleeding to slow enough for the market to stabilize and exhibit some sort of predictable and rational behavior. However, that glimmer of hope seems to be fading with each new restatement.

Paul Alcorn is a Contributing Editor for Tom's Hardware, covering Storage. Follow him on Twitter and Google+.

The International Data Corporation (IDC) has released its Worldwide Quarterly PC Tracker results for 1Q13, reporting that worldwide PC shipments during that quarter totaled a mere 76.3 million units. While that sounds like a lot to sell within a three-month span, the number actually dropped 13.9 percent compared to the same quarter in 2012. IDC said that was the worst quarter it has ever seen since it began tracking the PC market quarterly in 1994.

The slump in sales is a multi-pronged problem. Fading netbook shipments are hurting the low-end market while tablets and smartphones continue to divert consumer spending. Meanwhile, attempts to sell ultra-slim notebooks and touch-based solutions have been hampered by their end-price and component supply. A weak reception to Windows 8 is also to blame, and may have even slowed the market altogether.

"The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly," the company said.

Bob O'Donnell, IDC Program Vice President, Clients and Displays, said that the radical changes to the UI in Windows 8, the platform's removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. In order to reinvigorate the PC market, Microsoft will need to make some "very tough decisions moving forward."

The IDC also points to the restructuring and reorganizing efforts impacting HP and Dell, two of the nation's largest PC makers, as additional reasons behind the slump. Lenovo remains a notable exception, but mid- and bottom-tier vendors are struggling to identify growth markets within the U.S.

According to a chart provided by the IDC, HP commanded 15.7 percent of the worldwide PC market in 1Q13, followed by Lenovo with a close 15.3 percent. Dell fell into third place with an 11.8 percent share followed by Acer (8.1 percent) and Asus (5.7 percent). When compared to the same quarter in 2012, HP dropped 23.7 percent while Lenovo stayed level. Dell dropped 10.9 percent, Acer dropped 31.3 percent, and Asus dropped 19.2 percent.

"The U.S. market had another dismal quarter in 1Q13, contracting -12.7 percent year on year, with a drop of -18.3 percent compared to the fourth quarter of 2012," the company said. "With total volume falling to 14.2 million, quarterly shipments reached their lowest level since the first quarter of 2006. With this latest figure, the U.S. is now in its tenth consecutive quarter of year-on-year contraction (excluding a brief moment of growth – less than 2 percent year on year – in 3Q11)."

To read the full depressing report, head here.

The International Data Corporation (IDC) said on Tuesday that it has adjusted its worldwide tablet market forecast for 2013, increasing the number of units sold from 172.4 million to 190.9 million. By 2017, shipments to be upwards of 350 million units.

The big news stemming from the updated forecast is that Android's share of the 2013 tablet market will be 48.8-percent, slightly higher than Apple's 46-percent. Adding insult to injury, Android's tablet market share will actually decrease to 46-percent by 2017 whereas Apple's iOS will only control 43.5-percent.

Windows will see a market share increase over the next four years, controlling only 2.8-percent of the tablet market in 2013 and 7.4-percent in 2017. The ARM-based version, Windows RT, will only control 1.9-percent in 2013 and 2.7-percent in 2017. Windows shipments include Windows 8 and Windows 7 tablets, the firm stated.

"One in every two tablets shipped this quarter was below 8 inches in screen size. And in terms of shipments, we expect smaller tablets to continue growing in 2013 and beyond" said Jitesh Ubrani, Research Analyst for IDC's Tablet Tracker. "Vendors are moving quickly to compete in this space as consumers realize that these small devices are often more ideal than larger tablets for their daily consumption habits."

As an owner of both Nexus tablets, that comment hits the nail right on the head. The bulky 10-inch model may sport a larger screen and higher resolution, but the 7-inch Tegra 3-based model from Asus feels more stable and is easier to hold when reading The Walking Dead comics or surfing the Internet. The 10-inch Samsung model is better suited for stationary tasks like watching Netflix while using a tablet cover with a built-in kickstand.

Meanwhile, Apple is struggling to remain relevant by offering an 8.9-inch version of its iPad, the iPad Mini. What Apple has seemingly failed to realize is that consumers are gravitating to the $199 price range. Still, even the Amazon Kindle Fire HD 8.9-inch tablet with 32 GB of storage (and without offers) retails for $384 USD whereas the 32 GB iPad Mini costs $429 USD.

As for Microsoft, both Windows 8 and Windows RT are reportedly experiencing poor sales. Even Microsoft's attempt to win consumers over with branded solutions has failed to gain any traction. "Consumers aren't buying Windows RT's value proposition, and long term we think Microsoft and its partners would be better served by focusing their attention on improving Windows 8. Such a focus could drive better share growth in the tablet category down the road," added Tom Mainelli, Research Director, Tablets.

The report also states that the emergence of the 7-inch tablet form factor has damaged the prospects of the single-use eReader. Shipments peaked in 2011 at 26.4 million units, and then began its market descent with 18.2 million units in 2012. IDC reports that the eReader sector will see a modest growth in 2013 and 2014 before beginning a gradual and permanent decline in 2015.

So long, and thanks for all the fish, dear faithful eReader.

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The International Data Corporation's (IDC) Worldwide Quarterly PC Tracker reports that PC shipments in 2013 are expected to decline 1.3-percent. The forecast is based on poor holiday sales, an "underwhelming" reception to Microsoft's new Windows 8 platform, and a continuing economic "malaise" that further crimped IT budgets in the second half of 2012.

Taking that one step further, the report claims that PC shipments dropped 8.3-percent in 4Q12 compared to 4Q11, the most "substantial" decline recorded for a holiday quarter. Even emerging market growth potential is declining, slowing down to the same speed of growth seen in mature regions.

"2012 marked the first year that emerging markets have seen a volume decline, and while 2013 will return to growth, it is projected at less than 1-percent and with modest, single-digit growth through 2017," the report states. "For mature regions, 2013 will mark the third consecutive year of volume declines. IDC continues to expect limited growth in 2014 and 2015 with contracting volume in later years."

According to a provided chart, 148.4 million desktop PCs shipped worldwide in 2012, 95 million of which were in emerging markets and 53.4 million in mature markets. In 2013, the total number of worldwide shipments are expected to be 142.1 million, spanning 91.6 million units in emerging markets and 50.4 million units in mature markets. By 2017, only 141 million desktop PCs are expected to ship worldwide that year.

"The PC market is still looking for updated models to gain traction and demonstrate sufficient appeal to drive growth in a very competitive market," said Loren Loverde, Program Vice President, Worldwide PC Trackers at IDC. "Growth in emerging regions has slowed considerably, and we continue to see constrained PC demand as buyers favor other devices for their mobility and convenience features. We still don't see tablets (with limited local storage, file system, lesser focus on traditional productivity, etc.) as functional competitors to PCs – but they are winning consumer dollars with mobility and consumer appeal nevertheless."

Portable PCs, like laptops and Ultrabooks, are expected to gain traction in emerging markets within the next several years. In 2012, 110.9 units were sold, and IDC expects to see 115.5 units sold in 2013 and 148 million units in 2017. In mature markets, the numbers seemingly stay flat, with 91.1 million units in 2012, and an expected 88.3 million units in 2013 and 93 million units in 2017.

For more information about IDC's new report, head here.

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With tablet sales topping that of laptops for the first time during October, a research firm has said that the commercial success of the product will continue to strengthen in the coming years.

Due to the greater variety and cheaper prices of tablets, IDC raised its forecast for the market for 2012 and beyond. It predicts worldwide tablet shipments reaching 122.3 million in 2012, representing an increase from its earlier forecast of 117.1 million units. 

"Tablets continue to captivate consumers, and as the market shifts toward smaller, more mobile screen sizes and lower price points, we expect demand to accelerate in the fourth quarter and beyond," Tom Mainelli, IDC's research director for tablets, said.

"Android tablets are gaining traction in the market thanks to solid products from Google, Amazon, Samsung, and others," Mainelli added. "And Apple's November iPad Mini launch, along with its surprise refresh of the full-sized iPad, positions the company well for a strong holiday season."

It expects Android's worldwide tablet share for 2012 to reach 42.7 percent, an increase from 39.8 percent in 2011, while Apple's iPad sees its share dropping to 53.8 percent in 2012 versus 56.3 percent in 2011.

IDC also raised its forecast for worldwide tablet shipments in 2013 to 172.4 million units. By 2016, shipments should reach 282.7 million units. When the latter year does arrive, IDC predicts both Apple and Google will experience their share in the overall tablet market decreasing to 49.7 percent for iOS and 39.7 percent for Android.

As for Microsoft-based tablets, the company expects Windows tablets to increase its share in the market from 2.9 percent predicted for 2012 to 10.3 percent in 2016.

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In the latest report from the International Data Corporation (IDC), the firm said that 2012 will be a "challenging" year for the worldwide PC market as it struggles against intensifying competition from "alternative devices, global political uncertainty and a still-bumpy economic roadmap." The PC sector is expected to grow a mere 5-percent in 2012 compared to 2011's numbers, with nearly 383 million PCs expected to ship into the market across the globe.

According to the report, shipments during the first quarter were actually better than expected. This was likely due to a quicker-than-expected recovery of the HDD supply chain following the Thailand floods. There's also hope that Windows 8 will help reinvigorate the consumer market, but questions about the release date, functions, and pricing for Windows 8 limit the contribution the new OS may make.

"Consumer sentiment could be revived with UltraBook or Ultrathin systems provided the right price is reached," said said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker. "More price-cutting in the Android tablet landscape could free up some budget for PC purchases, but could also focus consumers on tablets rather than PCs. Ultimately, we expect modest PC growth this year as the industry works through the transition to Win8 and related devices."

Here in the States, the PC sector will continue to endure the "perfect storm" over the next few quarters before seeing any meaningful growth. This is due to consumers and business that have already bought a PC, and have no need to upgrade or expand. The upcoming presidential election is also putting a strain on the American people, forcing them to refrain from spending or hiring until early next year.

"The good news, however, is that the forthcoming release of Windows 8 promises to bring new classes of products that could lead to a stronger refresh cycle as the year ends," said David Daoud, research director, Personal Computing at IDC.

ARM-based desktops and hybrid laptops are just two examples of the new classes, the latter including Microsoft's just-revealed Surface slate. Powered either with an ARM or x86-based SoC (depending on the model), it goes beyond the tablet form factor by offering a cover that performs as a super-thin keyboard. The ARM-based Windows RT version is slated to launch this fall with the Windows 8 Pro x-86 version set to launch 90 days thereafter.

IDC expects the revamp of a sleeker Wintel platform to fuel additional growth in 2013 through 2016. Worldwide PC growth should reach 413.6 million units in 2013, then climb to nearly 491 million units in 2015 and 528.5 million units in 2016.

"Meanwhile, headwinds from the Euro crisis are increasingly being felt in the emerging markets, the previous stalwarts of growth. The outlook for emerging markets has become more mixed with Central Europe, Middle East and Africa (CEMA) increasing its outlook while Asia/Pacific (excluding Japan) and Latin America will experience slower growth in the short term," the firm said.

To read the full report, head here.

IHS, for example, believes that the situation will gradually improve beginning in Q1 2012 and could even result in excess supply as the currently added production of HDDs outside of Thailand is added to the production ramp as fabs in the country return to full production capability.

However, there are much more pessimistic analysts, such as John Rydning from IDC, which believe that the impact will be felt into 2013.

"I think the most painful period will occur now through February of next year," Rydning said in a quote published by Computerworld. "We expect the situation will improve, but it won't feel as if things are back to normal until 2013. "Rydning believes that HDD makers will eb able to meet "immediate demand" in the second half of 2012.

However, for now, the shortage is already forcing computer buyers to buy what is available and not what they want. Computerworld quotes Lenovo stating that some buyers will have to settle for off-spec HDDs in its products. Computerworld said that 750 GB, 320 GB, 250 GB and 160 GB drives are unavailable for some Thinkpad notebooks. Western Digital, which was hardest hit by the flood, recently said that it has restarted its hard drive production in one of its buildings, while all other facilities "remain under approximately two feet of water."

Last week we heard that Windows 8 was rumored to be hitting public beta in late February of next year. We're also expecting to see more of the operating system during Steve Ballmer's keynote address at the annual consumer electronics show in Las Vegas this coming January. However, if IDC is to be believed, PC users will find the next iteration of Windows 'largely irrelevant.'

All About Microsoft author Mary Jo Foley reports that one of IDC's "Worldwide System Infrastructure Software 2012 Top 10 Predictions" was that "Windows 8 Will Launch with Split Success." Explaining the prediction, IDC analysts say that Windows 8 will be largely irrelevant to those with traditional PCs, adding that they "expect effectively no upgrade activity from Windows 7 to Windows 8 in that form factor." As far as tablets are concerned, IDC believes that Microsoft will be too late to the tablet market to make any real impact.

It's not an entirely surprising prediction when you look at how comfortable users are with Windows 7. While the Windows 8's Metro UI smells a lot like Windows Phone 7 and promises a great interface for tablets and PCs with touchscreen displays, Microsoft has said that if you disable Metro, your Windows 8 desktop is going to look and feel a lot like the one in Windows 7. Throw in the fact that, as Foley points out, many businesses have just finished upgrading to Windows 7 from XP/Vista and it doesn't seem like such a crazy prediction. However, even if IDC is right about upgrades from Windows 7, Microsoft is still going ship a lot of copies of the OS with new PCs that sell after the operating system is released, so it's not all bad.

Do you plan on upgrading to Windows 8? Let us know in the comments below!