Sharpest Decline in Nine Years

PC manufacturers are experiencing a drop-off in demand for their products. Research firm Gartner (IT) reported Q2 shipments were down nearly 13% compared to the previous year — the sharpest decline in nine years.

Some market observers contend the market is cooling due to geopolitical uncertainty caused by the Russia-Ukraine war as well as inflationary pressures, leaving consumers more purchase-hesitant. The pattern represents a reversal from buying trends of the last few years.

Reversal of Pandemic Buying Spree

Spending on PCs and other devices surged during the pandemic as more people worked from home and classrooms went virtual. Purchases for at-home electronics declined as pandemic restrictions lifted and people returned to work and school. The drop off in demand was particularly steep in the market for lower-cost computers, such as Chromebooks.

Business spending has continued amid office reopenings, which is helping to offset the waning interest from consumers. Some companies, such as HP (HPQ), expect bottom lines to benefit from improving supply-chain dynamics.

Company Cutbacks

Amid the uncertainty, companies such as Intel (INTC) are taking precautionary measures to support financial resilience. This includes a temporary hiring freeze in its PC-chip division. Likewise, Micron Technology (MU) announced plans to slash spending amid soft demand for its memory chips.

Even as these companies adjust to the new market dynamics, executives and investors alike may find solace in the fact that demand for computers is still above pre-pandemic levels.

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