Apple leads global PC growth as demand returns after 2 years

A customer looks at Apple computers on display in an electronics store in Miami, Florida. Image: Joe Raedle/Getty Images
 
Apple, which released its latest MacBook laptops in early March, saw the most growth in the following months, as global shipments of personal computers rose by 3 percent in the second quarter of the calendar year 2024, according to tech market research provider IDC.
 
Excluding China, which is still weighing down on the global tech pickup, worldwide PC sales rose even stronger during the three months ended June 30, at 5 percent, according to IDC.
 

Helped by demand for computers with AI features, PC shipments reached nearly 65 million units in the three months ended June 30, which was a second straight quarter of growth after two years of decline, according to IDC.
 
"Two consecutive quarters of growth, combined with plenty of market hype around AI PCs and a less sexy but arguably more important commercial refresh cycle, seems to be what the PC market needed,” Ryan Reith, group vice president with IDC's Worldwide Device Trackers, said in a press release July 9.
 
The PC market faces the same challenges as other tech segments in the near term, Reith said. And while “the buzz is clearly around AI”, a lot is happening with non-AI PC purchasing also, he adds. Another factor to consider is that while commercial sales will likely see the biggest near-term increase in growth, consumer sales are yet to kick into high gear.
 
“All eyes are on Apple to drive that message later this year with anticipated product launches,” IDC notes in its press release. PC chip makers Qualcomm, Intel, and AMD are all likely to step up marketing campaigns around both commercial and consumer PCs, according to IDC.
 
“Outside the commercial refresh cycle, promotional activity from consumer-oriented brands and channels have helped bolster the segment,” Jitesh Ubrani, research manager with IDC's Worldwide Mobile Device Trackers, said in the press release.

Also read: Can Apple's partnership with OpenAI revive Siri?
 
"The market has also moved past the rock-bottom pricing brought about by excess inventory last year, signifying growth in average selling prices due to richer configurations and reduced discounting,” Ubrani adds.
 
Apple's shipments jumped close to 21 percent in the June quarter versus the same period in 2023, the biggest increase among large multinational PC makers. Acer came second, with about 14 percent growth year on year.
 
By market share, China's Lenovo Group retained the top spot, with a share of close to 23 percent, followed by HP with about 21 percent, and Dell Technologies at 15.5 percent. Dell’s shipments, however, fell 2.4 percent in the June quarter.
 
After a surge in post-Covid tech spending, the broader tech market had gone into a lull worldwide, owing to a combination of pullbacks in discretionary purchases, macroeconomic uncertainty due to the war in Ukraine and then the Middle East, and the US Federal Reserve holding interest rates at the current high levels versus expectations that the central banker might start lowering them.
 
This affected growth across the board, from computer hardware to IT services to business software cloud subscriptions. For example, over the last 5-6 quarters, India’s IT services companies have shed most of the jobs they had added in the immediate surge in demand as Covid abated.
 
However, if the PC sales pickup reflects a broader pickup in tech spending, we will see India’s top IT companies begin to report better numbers and more a project more positive outlook as the rest of the year unfolds.

Also read: Apple's IPhone Exports From India Have Doubled, But Component Manufacturing Needs To Pick Up
 
Tata Consultancy Services, India’s biggest software services company, will kick off the sector’s earnings results tomorrow, when it reports its fiscal Q1 results, for the three months ended June 30, after markets in Mumbai.
 
“Deal wins continue to see improvement,” analysts at the French multinational bank BNP Paribas write in a July 1 report on the IT services sector. The deals are being driven by recovery in consumer packaged goods and retail, the analysts write.
 
In June, Accenture reported the highest number of deal wins (5), followed by Wipro (3). Wipro’s $500 million deal with a US-based communications service provider and HCL Tech’s deal with apoBank were the deal highlights for June 2024, according to the BNP analysts. TCS and second-ranked Infosys have also reported strong deal wins in recent months.
 
Although “discretionary spending remains muted”, the IT sector’s revenue growth will improve sequentially for most of the top companies, due to large-deal ramp ups, and stability in the banking, financial services and insurance vertical, analysts at Emkay Global Financial Services write in a July 1 report on the sector.
 
India’s nascent SaaS sector has had a tough go as well over the last 18 months. Freshworks, the Chennai-to-Silicon-Valley provider of helpdesk and IT services management software, has seen its net dollar retention rate (NRR) go down from 115 percent at the end of June 2022 to 107 percent at the end of June 2023, to 106 percent at the end of this year’s first quarter.
 
NRR is an important metric in the cloud software sector, reflecting a company’s ability to hold on to existing customers, while adding new accounts. Nasdaq-listed Freshworks, which elevated Dennis Woodside to the post of CEO, taking over from Founder Girish Mathrubootham in May, is expected to report its June-quarter results on July 30.