Shipments of computing devices around the world – personal computers, tablets and mobile phones – are expected to decline for the second straight year in 2023, according to a report released on Tuesday.
Analyst firm Gartner Inc. said on Tuesday that global device shipments are expected to fall 4.4% to around 1.7 billion units in 2023, after falling 11.9% to 1.82. billion in 2022. PC shipments will drop 6.8% to 267.7 million units in 2023, following a 16% drop in 2022; tablet shipments will fall 2.9% to 133 million units after the 12% drop in 2022; and mobile phone shipments will decline 4% to 1.34 billion units in 2023, following an 11% drop last year.
“The depressed economic market will continue to dampen device demand throughout 2023,” Ranjit Atwal, principal analyst at Gartner, said in a statement. “In fact, end-user spending on devices is expected to decline 5.1% in 2023.”
“While business confidence started to recover from the worst of the pandemic, it has now fallen significantly in most regions,” Atwal added. “We don’t expect inflation relief and recessionary troughing to occur until the fourth quarter of 2023.”
That’s bad news for device makers and vendors who rely on them for sales, like semiconductor companies. Samsung Electronics Co.Ltd. 005930,
– which makes consumer devices like the Galaxy line of devices as well as semiconductors – reported a 69% drop in operating profit and an 8% drop in revenue during the holiday period on Tuesday. Rival Apple Inc. AAPL,
is expected to release its holiday earnings on Thursday afternoon, after reports suggest its PC sales have held up better than other makers like HP Inc. HPQ,
and Dell Technologies Inc. DELL,
in the fourth quarter, and smartphone shipments also outpaced their competitors.
Earnings outlook: Apple’s holiday results could rely on unlikely hero amid iPhone uncertainty
Gartner predicted that PC inventory levels would not return to normal until the second half of 2023. The cost of inventory clearance was hitting very close to home, as falling prices during a busy holiday string made all the more difficult to block as the industry has faced the worst PC shipment declines in recorded history.
Notice: Intel Just Had Its Worst Year Since The Dot-Com Collapse, And It’s Not Getting Better Anytime Soon
This will weigh on the semiconductor sector, which will see fewer orders as device makers hold on to inventory. From Texas Instruments Inc. TXN,
Earnings Last week, chip revenue was difficult to watch, especially with Intel Corp. INTC,
reporting its worst year since the dot-com meltdown. Intel’s rapidly falling gross margins were accelerated by a 400 basis point drag from inventory liquidation alone.
This draws much more attention to Advanced Micro Devices Inc. AMD,
which reports after the bell on Tuesday, given that chief executive Lisa Su said three months ago that the company would “definitely come out of the year in a better place.” Late Monday, NXP Semiconductor NV NXPI,
released results online, but its outlook for the current quarter disappointed Wall Street.
In depth : AMD earnings come under even greater scrutiny after Intel’s ‘surprisingly bad’ outlook
The PHLX SOX semiconductor index,
was hot with a 15% gain in January, while the S&P 500 SPX index,
rose 5.5%, and the tech-heavy Nasdaq Composite Index COMP
jumped 10%.