PC manufacturers are currently struggling with a surplus of unsold inventory, leading to a difficult start to the year as Apple‘s MacBook shipments fell by 40.5% in the first quarter, according to market intelligence firm IDC.

What Happened? Market intelligence firm IDC compiled data revealing that the first quarter of 2023 saw an overall global PC shipment decline of 29%, with Apple being the hardest hit.

Mac shipments were reduced almost by half, falling from 6.9 million computers in Q1 2022 to just 4.1 million in Q1 2023.

HP fared the best of major traditional PC companies, with a 24.2% sales decline to 12 million from 15.8 million.

According to IDC, weak demand, excess inventory, and a worsening macroeconomic climate, all contributed to the sharp drop in traditional PC shipments.

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Why it Matters? IDC research manager Jitesh Ubrani stated that even though the channel inventory has decreased over the last few months, it is still significantly higher than the recommended healthy range of four to six weeks.

Ubrani added that despite the use of steep discounts, channels, and PC manufacturers should anticipate the surplus inventory to continue well into the middle of the year and possibly into the third quarter.

IDC’s analysts suggest that manufacturers can increase their capacity to separate from China and relocate production elsewhere due to the reduced demand. For instance, Apple has already moved some of its iPhone production to India and some MacBook production to Vietnam, which will shield the company from political tensions between China and the United States. However, it’s difficult to imagine a complete decoupling from China.

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