Lenovo, other PC makers face grim holidays & slow start in 2023, report warns

RESEARCH TRIANGLE PARK – In these days of non-pandemic lockdowns and a slowing economy, personal computer sales across the U.S. are falling. And especially hard hit is Lenovo, which lost market share and fell to fourth in shipments.

And buyers are not likely to reverse the trend over the holidays.

So says research firm Canalys in a new report which says sales fell by more than 12% year-over-year in the third quarter. (The statistics closely follow reports from Gartner and IDC.)

No. 2 HP already has disclosed plans to cut 6,000 jobs, citing in part the sales slowdown. Lenovo has not publicly announced any cuts and recently reported strong financial results for its most recent quarter, citing positive results from diversification of its product portfolio with less reliance on PCs.

‘Contraction’ the word

“The US PC market was already in an extended period of contraction as both consumer and education demand struggled with inflation and saturation,” said Brian Lynch, Canalys Research Analyst. “Now, the previously resilient commercial segment has started to wane, posting its first year-on-year decline in 2022.”

There is unlikely to be much Christmas cheer either.

“Looking ahead, the US PC market will face further headwinds,” Lynch said in the report. “Despite the Q4 holiday season, the market will suffer a continued downturn.”

He cited several reasons:

• Cash-strapped consumers will cut spending on expensive technology products.
• Retailers have ramped up promotions in recent months to make room for new device launches as the holiday season approaches. But overall retail inventories are still growing faster than sales.
• The education segment will begin a slow recovery in 2023, but the bulk of device refreshes are now likely to occur in 2024.
• Education funding remains healthy, but schools are expected to want better-specified devices, which come with higher price tags.

“Given the confluence of these factors, we expect US PC shipments to undergo further declines in the first half of 2023,” Lynch warned.

Lenovo, the world’s top PC seller with dual headquarters in the Triangle and Beijing, was hit by a 22% decline in sales, dropping the company to fourth place behind Dell, HP and Apple.

What hurt Lenovo most was a drop off in commercial sales, Canalys reported.

The latest statistics:

Note: Unit shipments in millions. Percentages may not add up to 100% due to rounding.

Source: Canalys PC Analysis (sell-in shipments), November 2022

Note: Unit shipments in millions. Percentages may not add up to 100% due to rounding.

Source: Canalys PC Analysis (sell-in shipments), November 2022