Waning demand and falling shipments force PC manufacturers to cut prices
Excess inventory can be good for consumersBy Rob Thubron 9 comments
In context: The current global economic downturn is well documented. Shipments of electronic goods are crashing as people rein in their spending, causing excess inventory. However, the good news for consumers is that analysts say the situation is forcing PC and tablet manufacturers to discount their products heavily.
PCs, phones, and gaming monitors are just some of the many items to see their shipments crash this year as the threat of global recession looms large. Market research firm Canalys' recent report shows PC shipments in the US were down 13% in Q3 despite attractive promotions.
Another analyst, IDC, forecasts similar figures: PC and tablet shipments will be down almost 12% in 2022, with further declines expected next year. It's leading to excess inventory and market saturation, forcing manufacturers to reduce their prices.
"The reality is that both PC and tablet makers will struggle in the coming months as not only are volumes expected to decline, but so will average selling prices," said Jitesh Ubrani, IDC's research manager for mobility and consumer device trackers (via ZDNet).
IDC's October report, which you can read about here, revealed tablet shipments were down -8.8% YoY in Q3, and Chromebooks were down a massive -34%. Things don't appear much better in the near term, with traditional PC shipments expected to drop 5.6% to 281 million units next year, while tablets will decline 6.7% to 148 million units. Consumers are even being more cautious at the lower end of product price ranges due to rising living costs and prioritizing spending on essentials such as bills and food.
We've seen previous reports of excess inventory causing manufacturers to slash their prices, from SSDs and RAM to previous-gen graphics cards. The lack of demand for the new RTX 4080 has seen scalpers unable to sell the cards above MSRP (and they can't return them). It's led to rumors that Nvidia is considering an official price cut for the $1,199 Lovelace product. The fact the best performing GPUs in last months Steam survey were all cheaper models illustrates this constrained spending.
IDC forecasts shipment growth to return to normal in 2024. Until then, expect PC manufacturers to keep cutting their prices as they try to tempt buyers.