The PC market had a rough first quarter, with both IDC and Canalys reporting that worldwide shipments of desktops and laptops suffered a drop of around 30 percent in the first quarter of 2023 versus the same quarter in 2022. IDC reports a drop of 29 percent to 56.9 million units, while Canalys reports a drop of 32.6 percent to 54 million units.

Although all five of the biggest manufacturers suffered double digit declines, Apple appears to have been hardest hit. IDC reports that its shipments dropped by 40.5 percent, while Canalys is reporting a drop of 45.5 percent. Both research houses suggest the Mac manufacturer’s market share has also dropped by between one and two percentage points.

The drop in Mac shipments isn’t exactly a surprise. Apple previously reported a drop of 29 percent during its last earnings release (covering the three months ending December 31st, 2022), and had previously warned that sales of its computers would “decline substantially.” But these reports put Apple’s drop in the context of an entire industry that’s been feeling the pinch for multiple quarters now. Canalys notes that Q1 2023 was the fourth consecutive quarter of double-digit annual declines for PC makers in general.

There appear to be a couple of interrelated reasons for the drop. One is the end of the explosion in demand that’s occurred over the past couple of years as everyone stocked up on computer hardware to allow employees and students to study and work from home. But this doesn’t tell the full story, since IDC notes that this quarter’s shipments were “noticeably lower” than pre-pandemic levels. It seems likely that broader economic uncertainty is also playing a part, with Canalys’ Ishan Dutt citing interest rate rises in the US and Europe as another cause of reduced demand.

Both IDC and Canalys suggest that demand will pick up in the second half of 2023 and 2024. “By 2024, an aging installed base will start coming up for refresh,” said IDC’s Linn Huang. “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.” However Huang also cautions that “if recession in key markets drags on into next year, recovery could be a slog.”

There’s apparently at least one upside to this drop in demand according to IDC: supply chains are getting some breathing space to recover, allowing PC makers to explore options outside of China. Bloomberg had a great piece last week on Apple’s attempts to diversify its manufacturing in the face of mounting geo-political pressures.