PC Makers Are Looking for a New Floor

That new normal for the personal-computer market is proving elusive.

Following a banner year in 2021, global PC sales have been in a downward spiral. The market-research firm IDC reported last month that PC shipments in the second quarter slid more than 15% year over year following a 5.1% drop in the first quarter. PC shipments in the first half of this year are down 10.1% year over year, the worst slide for that period since at least 2015, according to IDC’s data.

The situation isn’t improving, either. On Tuesday morning, the retail chain

Best Buy

cited PCs as well as the home-theater category as the largest contributors to its 12.1% decline in comparable-store sales for the July quarter. Later in the day,

HP Inc.

HPQ -1.36%

indicated that combined revenue for its PC hardware segments fell 5% year over year to $9.1 billion for the fiscal quarter ended in July. That, along with weakness in the company’s printing business, brought HP’s total revenue to about $14.7 billion for the quarter, which according to FactSet was 6% below Wall Street’s forecast, the company’s largest miss in at least five years.

Its rival Dell has fared a little better, managing to keep its PC business positive for the July quarter thanks to corporate customers. But the company reported last week that revenue growth in its client-solutions segment, mostly made up of PCs, decelerated to 9% year over year compared with 17% growth in the prior quarter. A sharp drop in consumer PC demand was mostly to blame, though Dell executives added on the company’s earnings call that corporate demand also started to fall late in the quarter. Both Dell and HP cut their earnings projections for their current fiscal years. Dell said it now expects revenue to be flat to up 2% for the fiscal year ending in January—a notable drop from the 6% gain it projected three months ago.

HP, for its part, sees the situation as temporary. On a call Tuesday, Chief Executive Officer

Enrique Lores

said the company maintains its view that the PC market “is going to be significantly bigger than before the pandemic.” This stems from the view that hybrid work—employees dividing their time between the office and home—will eventually result in two computers per worker as the new normal. IDC projects PC sales of about 305 million units this year, which is down nearly 13% from 2021 but still 15% above the annual average of around 265 million units in the years 2015-2019.

That outlook could still prove optimistic if a recession hits and crimps corporate spending even more. And, despite signs that the job market remains tight, even cash-rich tech companies are scaling back hiring and watching expenditures. Others are going to even greater lengths; Tuesday afternoon brought a report that



Snap Inc.

plans to lay off about a fifth of its workforce. For PC makers banking on more workers getting plugged in, such trends don’t compute well.

Write to Dan Gallagher at dan.gallagher@wsj.com

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