Worldwide demand for personal computers dropped 29% year-over-year in the first quarter, according to new International Data Corp. research.

In a preliminary market report released Sunday, IDC estimates that consumers and organizations bought 56.9 million PCs last quarter. That’s down from 80.2 million units the same time a year earlier. IDC recorded a similar sales drop in its previous market report, which focused on the last three months of 2022. 

The research firm attributes the PC industry’s weak first-quarter performance to multiple factors. Lower demand and the uncertain economy are two of the reasons IDC pointed out. It believes that elevated inventory levels played a part as well: There’s a significant number of unsold machines left over from previous quarters.

According to IDC, excess inventory also weighed on PC sales in the previous quarter. That led PC makers to lower prices in bid to encourage sales, which hurt profit margins. Despite the discounts, IDC estimates that inventory levels could remain high for the foreseeable future.

“Though channel inventory has depleted in the last few months, it’s still well above the healthy four- to six-week range,” said IDC research manager Jitesh Ubrani. “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.”

IDC estimates that the three largest PC makers all experienced double-digital shipment declines in the first quarter.

Apple Inc. experienced a particularly significant drop in demand during the fourth quarter. Customers bought 4.1 million Macs and Macbooks in the first quarter, 40.5% less than a year ago.

Meanwhile, ASUSTek Computer Inc. retained its position as the fifth-largest PC maker with 3.9 million units sold. Lenovo Group Ltd., the top manufacturer by market share, shipped 12.7 million machines in the three months March 31. That represents a year-over-year decline of 30.3%. HP Inc. sold 12 million PCs, or 24.2% less than 12 months earlier, while Dell Technologies Inc. sold 12 million in what amounts to a 31% decline. 

According to IDC, smaller PC makers accounted for 14.7 million of the 56.9 million machines that consumers bought during the first quarter. Those companies saw their collective market share shrink to 22.9% from 23.9% during the first quarter of 2022. 

IDC believes that PC sales could start to rebound toward the end of the year. According to the research firm, companies’ efforts to replace machines running legacy versions of Windows with new Windows 11 computers could lift demand in the latter part of 2023. However, IDC cautioned that the pace of growth will depend on macroeconomic conditions. 

“By 2024, an aging installed base will start coming up for refresh,” said Linn Huang, IDC’s research vice president for devices and displays. “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.”

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