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Slowing PC sales spark lower prices

PC prices are dropping as manufacturers lower prices to move inventory. Market saturation following the pandemic is a significant factor in the drop in sales.

Companies can get a good deal on PCs due to a significant drop in demand.

Global shipments of desktops and laptops dropped 28.1% year to year in the fourth quarter of 2022, IDC reported this week. Shipments for the whole year declined by 16.5% from 2021.

Average selling prices for PCs fell as manufacturers lowered price tags to jumpstart sales, said IDC analyst Jitesh Ubrani. "The main reason we've seen discounting in the past few months has been because many channels and vendors are sitting on excess inventory due to the slowdown in demand."

The analyst firm was still collecting data, so it wouldn't know how much prices have fallen until next month, Ubrani said.

PC vendors no longer wrestled with the component shortages that started during the pandemic, Ubrani said. Intel recently reported it planned to raise prices, but that won't have much near-term impact because manufacturers bought chips in advance to control costs.

Market saturation significantly contributed to the double-digit drop in shipments in 2022. Businesses and consumers bought PCs at the start of the pandemic in 2020 through 2021 to support working and learning from home.

Also, consumers had more money because they couldn't travel or go to concerts, movies and the theater. In 2020 and 2021, PC shipments rose 13.6% and 15.1%, respectively, according to IDC.

"As a result, they spent more on PCs, and household density for PCs increased," Ubrani said. "But now, the market is coming off the pandemic high," Ubrani said.

IDC predicts the overall PC market will grow again in 2024. The analyst firm expects businesses to dump old PCs still running Windows 10. Microsoft plans to drop support for the operating system on Oct. 14, 2025.

Smartphone trade-in values rise

There's also some good news in the smartphone market for small businesses that get rid of employees' old phones through trade-in programs.

The trade-in value for used and officially refurbished phones increased last year as demand for the latest smartphones fell, IDC reported.

Smartphone shipments dropped 9.1% in 2022 to 1.24 billion units, IDC reported. Inflation and geopolitical tensions are two macroeconomic factors contributing to the decline.

Meanwhile, shipments of used and officially refurbished smartphones rose 11.5% last year, to 282.6 million units. IDC expects the trend to continue through 2026 at a compound annual growth rate of 10.3%, reaching 413.3 million units at the end of the period.

The highest resale value is on premium smartphones, said IDC analyst Anthony Scarsella. That trend favors Apple because of the component quality in its expensive iPhones.

"They cost more than anything out there, and they tend to hold their value," he said. As a result, distributors sell older iPhones in countries where people can't afford new models.

Small businesses that want to reap the trade-in benefits should move fast. Prices could change at any time, IDC said.

Antone Gonsalves is the networking news director for TechTarget Editorial. He has deep and wide experience in tech journalism. Since the mid-1990s, he has worked for UBM's InformationWeek, TechWeb and Computer Reseller News. He has also written for Ziff Davis' PC Week, IDG's CSOonline and IBTMedia's CruxialCIO, and rounded all of that out by covering startups for Bloomberg News. He started his journalism career at United Press International, working as a reporter and editor in California, Texas, Kansas and Florida. Have a news tip? Please drop him an email.

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