Tinydeals Mid-Year Observation: Laptops on a roller coaster ride may recover in the second half of the year

Whether time moves fast or slow, industries have undergone profound changes in the first half of the year. Compared to previous years, 2023 has been particularly unique. In the fields of technology and the internet, these changes are especially evident and worth reviewing. The laptop market recovery is one of the key trends shaping the industry, offering insights into future growth.

Laptops on a roller coaster ride, recovery may come in the second half of the year

Laptops Face Market Fluctuations, But Recovery May Be on the Horizon

The first half of 2023 saw various industries gradually recovering from the pandemic’s impact. However, new challenges emerged. Notably, Chinese companies increased their global presence across multiple sectors, playing a more significant role in shaping industry trends.

In mobile phones, fierce competition peaked during the 618 sales event. Meanwhile, China’s dominance in the new energy vehicle sector continued to grow. In smart wearables, brands like Apple, Huawei, and Xiaomi made significant moves, signaling potential shifts in the industry. The laptop industry, however, experienced a difficult period, but according to Lenovo’s chairman, this may be “the last darkness before dawn.”

To analyze these industry shifts, Tinydeals has launched a special series, “Tinydeals Mid-Year Observations.” This initiative highlights key trends in technology, automobiles, and other industries. In this article, we focus on the laptop market’s performance in 2023.

Tinydeals mid-year observation: Laptops may recover in the second half of the year

Laptop Market Performance in 2023: Challenges and Signs of Recovery

In 2021, global laptop shipments reached a record 268 million units. However, shipments began to decline in 2022, a trend that persisted into 2023. In the first quarter of 2023, global PC shipments dropped by 33%, while shipments in China decreased by 24%. Despite this downturn, multiple indicators suggest a potential rebound in the latter half of the year.

Global PC market shipments in the first quarter of 2023

Shipments Decline in the First Quarter

The global PC market faced significant challenges in early 2023. Data from Canalys revealed a 33% decline in desktop and laptop shipments, marking the fourth consecutive quarter of double-digit losses. Laptop shipments alone fell by 34% to 41.8 million units. Similarly, TrendForce reported a year-on-year decline of 39% in global notebook shipments, totaling approximately 33 million units.

In key markets, the numbers were equally concerning:

• China: Shipments fell 24% year-on-year, with laptop shipments declining 22%.
• United States: PC shipments dropped 28%, with laptops down 31%.
• Western Europe: PC shipments fell 37%, while laptop shipments decreased 37%.
• India: The market saw a 35% decline, with laptop shipments dropping 41%.

China’s PC shipments fell 24% year-on-year in the first quarter of 2023

Factors Behind the Decline

The primary reason for the market downturn is economic uncertainty. Canalys senior analyst Ishan Dutt noted that high inventory levels and weak demand continue to hinder recovery. Interest rate hikes in major markets such as the U.S. and Europe have further pressured commercial sales, while consumer spending remains cautious.

Additionally, TrendForce reported that slow inventory clearance has caused major brands to cut orders. However, as inventory pressure eases, demand is expected to increase in the coming months, driving quarter-on-quarter shipment growth.

Market Recovery in the Second Half

Despite short-term setbacks, signs of recovery are emerging. According to Canalys, the PC market’s long-term growth remains intact, supported by factors such as the transition to Windows 11, digital education expansion, and post-pandemic user base growth.

Lenovo’s Chairman and CEO, Yang Yuanqing, expressed optimism at the company’s 2023 Global Suppliers Conference. He stated that while inventory adjustments are ongoing, actual demand remains stronger than shipment figures suggest. He believes that the laptop market recovery is nearing its end and that growth could resume as early as the second half of 2023.

China’s desktop and notebook computer shipments in the first quarter of 2023

Several factors could contribute to this recovery:

• Government and enterprise investments: Large-scale orders may help stabilize the market.
• Inventory stabilization: As high inventory levels clear, new orders may increase.
• Back-to-school demand: Education sector purchases could drive additional sales.
• Windows 10 upgrades: As businesses transition to Windows 11, the need for new hardware will rise.

Furthermore, improving consumer confidence in markets like India, along with renewed education and public sector spending, could help boost shipments in the latter half of the year. However, despite these positive indicators, TrendForce predicts an overall decline of 13% in global notebook shipments for 2023 due to ongoing economic challenges.

Conclusion

While the first half of 2023 presented significant hurdles for the laptop industry, the market is showing signs of stabilization. Factors like easing inventory pressure, increased enterprise spending, and upcoming education demand suggest that a recovery is likely. As we move into the second half of the year, it will be crucial to monitor these trends closely. For more insights into the tech industry and beyond, visit Tinydeals.