Apple's MacBook shipments fell by 40.5 percent in the first quarter, signalling a difficult start to the year for PC manufacturers currently struggling with a surplus of unsold inventory, according to a report.
Last week, Korean media outlet The Elec also reported that Apple halted the production of its M2 chip in January for two months due to low MacBook demand.
“From January to February, Taiwan’s TSMC, Apple’s contract chip producer, didn’t send any of its finished 5-nanometer M2 wafers to packaging and testing companies to be cut and assembled as finished chips, sources said,” the report read.
While the production seems to have resumed in March its “volume has dropped by half compared to a year ago,” as per The Elec sources.
Although Apple struggled with iPhone supply challenges in particular during the first quarter but also experienced drops in Mac and wearables, its revenue decreased by about five percent year-over-year in the period, a greater decline than analysts had anticipated.
Apple CEO Tim Cook also mentioned in his Q1 2023 earnings call that Apple faced a "challenging" situation in the PC market. “We have a low share but we have a competitive advantage with Apple silicon, so strategically we are well positioned within the market. But I think it will be a little rough in the short term," he said.
But Apple was not the only maker to experience this low. Shipments by all PC makers combined slumped 29 percent to 56.9 million units — and fell below the levels of early 2019 — as the demand surge driven by pandemic-era remote work evaporated, as per IDC’s latest report.
Among the market leaders, Lenovo and Dell registered drops of more than 30 percent, while HP Inc. was down 24.2 percent. No major brand was spared from the slowdown, with ASUS rounding out the top five with a 30.3 percent fall.
“Though channel inventory has depleted in the last few months, it’s still well above the healthy four to six week range,” said Jitesh Ubrani, IDC research manager. “Even with heavy discounting, channels and PC makers can expect elevated inventory to persist into the middle of the year and potentially into the third quarter.”
However, Linn Huang, research vice president, Devices and Displays at IDC, believes that "If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11. If recession in key markets drags on into next year, recovery could be a slog."
