Worldwide shipments of total devices (PCs, tablets and mobile phones) are projected to decline 4.4% in 2023, to total 1.7 billion units, according to Gartner, Inc. In 2022, the devices shipment market declined 11.9%.
“The depressed economic market will continue to dampen demand for devices throughout 2023. In fact, end-user spending on devices is projected to decline 5.1% in 2023,” said Ranjit Atwal, Senior Director Analyst at Gartner. “Just as business confidence was beginning to recover after the worst of the pandemic, it has now fallen significantly in most regions. We do not expect relief from inflation and the bottom of the recession to occur until the fourth quarter of 2023.”
The downward trend affecting the devices market will lessen in 2023 on the expectation of a less pessimistic economic outlook through 2023, eventually increasing consumer and business spending.
Through 2023, PC vendors will reduce inventory levels and Gartner analysts expect PC inventory levels will return to normal by the second half of 2023 after significantly increasing in 2022. “Inventory levels increased due to vendors overestimating market demand and because of the collapse in consumer confidence and dramatic fall in demand,” said Atwal.
In 2022, while many business PCs could upgrade to the Windows 10 operating system (OS), many did not. By the end of 2023, Gartner expects more than 25% of business PCs will upgrade to Windows 11. However, Windows 11 will not drive enough sales to reach the same volumes seen between 2020 and 2022. In addition, as high inflation rates and impending recession decrease discretionary spend and budgets, Gartner estimates consumers and businesses will extend their PC and tablet replacement cycles by over 9 months by the end of 2023.
Replacement Cycles of Mobile Phones Will Also Extend in 2023
Gartner forecasts worldwide smartphone shipments to decline 4% in 2023. Smartphone shipments are projected to total 1.23 billion units in 2023, down from 1.28 billion units in 2022.
“Consumers are holding onto their phones longer than expected, from six to 9 months, and moving away from fixed to flexible contracts in the absence of meaningful new technology,” said Atwal. “In addition, vendors are passing on inflationary component costs to users which is dampening demand further. End-user spending on mobile phones is projected to decline 3.8% in 2023.”