Top 3 Predictions for Devices in 2023

After rapid pandemic-related growth, the PC market will shrink in 2023

Top 3 predictions for Devices in 2023

  1. PC revenue will decrease
  2. Price competition will reduce margins
  3. The next advances in PCs will be cellular connectivity and AI-backed features


Top 3 Predictions for Devices in 2023


 

Following the pandemic-related surge in PC sales and AUR, vendor revenue and margins will be lower in 2023

2023 will see a return to normal PC market conditions, but with a changed role for PCs. The pandemic changed the way people work, including how they work with PCs. TBR believes the work changes will have lasting effects. While some people and some companies are returning to pre-pandemic workstyles, the pandemic permanently accelerated the existing trends toward hybrid workplaces and a greater reliance on PCs for work and collaboration.
 
Most importantly for PC vendors, buyers and users have greater respect for PCs. Not only have PCs been essential for collaboration and maintaining productivity under changed working conditions, they also have been greatly enhanced. While many of these improvements preceded the pandemic, the greater reliance on PCs has made such advances important. The solid-state drive (SSD), now ubiquitous, makes PCs faster and more reliable, as well as contributing to reducing weight and power consumption. PCs are thinner, lighter and brighter and have a much longer battery life.
 
Buyers are more willing to spend on these more productive PCs, as well as on attached services and accessories. This has contributed to large increases in average unit revenue (AUR) and to higher margins, but buyers also are keeping their PCs longer because of greater reliability and greater satisfaction with performance.
 
The increase in PC life cycle, combined with PC supply catching up with demand for the first time in four years, will challenge PC vendors’ revenue and margins in 2023.

 
TBR’s 2023 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, devices, digital transformation, IT infrastructure, professional services, federal IT services and telecom.