Demand for personal computers hits a 20-year low after a pandemic boom

Worldwide shipments of PCs in the third quarter tumbled 19.5% from a year ago, according to the most recent study by Gartner. That’s the steepest decline since the company began tracking the market in the mid-1990s. It’s also the fourth consecutive quarter of year-over-year declines.

The slowdown comes as supply chains are finally returning to normal for manufacturers. Consumers and businesses, however, are holding off on buying new systems as economic uncertainties get cloudier. Many consumers, meanwhile, bought a new PC within the last two years, after they were either forced to work from home or looking to keep themselves entertained during the heart of the pandemic. Sales of laptop and desktop computers exceeded 302 million in 2020, a 13% increase from 2019 and the most since 2014, according to market tracker International Data Corp.

“This quarter’s results could mark a historic slowdown for the PC market,” said Mikako Kitagawa, director analyst at Gartner. “High inventory has now become a major issue given weak PC demand in both the consumer and business markets. Back-to-school sales ended with disappointing results despite massive promotions and price drops, due to a lack of need.”

Some 68 million PCs were shipped in the third quarter, compared to nearly 84.5 million a year ago.

Among manufacturers, Lenovo gained market share, despite lower shipments. HP took the biggest hit globally, with a big dip in shipments as well as market share.

The decline in the U.S. Market was slightly lower than the worldwide total. Shipments in the U.S. Were down 17.3%, but this represented the fifth quarter of declines. Laptop sales to large businesses showed the biggest slowdown, but small and midsize businesses weren’t quite as pessimistic.

“Inflation is the biggest concern in the U.S. Market, but smaller businesses are showing relative optimism about macroeconomic conditions,” said Kitagawa.