HP, Dell report that PC sales are slowing as business demand fluctuates

Dell and HP reported softening demand for enterprise PCs as the PC market continues to stagnate.

The companies recently warned investors that while business PC sales grew last quarter, business demand for the computers slowed. Executives at both companies cited economic uncertainty as a reason for easing demand for enterprises. Inflation and high energy costs have led to a slowdown.

Dell co-chief operating officer Chuck Whitten told investors on Aug. 25 that “we saw a meaningful change in corporate sentiment during the quarter,” with companies slowing and reducing order volumes.

HP has also seen delays in orders, HP CEO Enrique Llores said on an earnings call Tuesday, according to a transcript of Seeking Alpha .

The city of Happy Valley, Oregon plans to delay its PC purchase, said Wilson, information systems manager. During the outbreak, the city sped up its usual four-to-five-year computer replacement cycle to handle remote work. As a result, he now has many laptops bought in the last two years.

“This resets the clock, if you will, for those systems going forward,” said Happy Valley, which will return to its normal replacement schedule.

Another municipality, the city of Corona, California, plans to spend more on computing because it has adopted cloud-based virtual desktop technology. Shifting the processing load to the cloud has reduced the need to provide workers with high-performance machines, meaning the city can’t afford to use cheap equipment and replace it as often, CIO Chris McMasters said.

“[We’ve run] Engineering [computer-aided design] For example, systems on tablets generally require some serious hardware,” he said.

The PC market recently saw its two-year winning streak, with many firms fully stocked with new computers and fears that the downturn could drive down prices. Worldwide desktop, laptop and workstation shipments have fallen in the past two quarters, according to research firm IDC. Declining consumer demand accounted for much of last quarter’s 15.3% decline, but analysts saw a swing in enterprise buying.

While business buying is cooling, it is likely to be stronger than the consumer market, IDC analyst Jitesh Ubrani said.

“We believe that large enterprises are better positioned than consumers to weather the economic storm,” he said. “As a result, they are more likely to delay purchases than to let demand disappear completely.”

Despite the downturn, the PC market floor is higher than it was in the pre-Covid years, Ubrani said. Hybrid computing, hardware replacement cycles and the end of Windows 10 support will drive demand for new computers in the coming years.

The slowdown in purchases doesn’t mean computers have lost the importance they gained during the pandemic, Lores said.

“PCs are more relevant now than they were three years ago,” he said.