While it's true that CEOs plan ongoing spending in IT during 2023, it likely won't include a significant investment in end-user computing devices. By and large, digital transformation continues to be driven by software advances.
Worldwide shipments of total end-user computing devices are projected to decline by 4.4 percent in 2023, to a total of 1.7 billion units, according to the latest market study by Gartner.
Note, in 2022, the devices market already declined by 11.9 percent.
"The depressed economic market will continue to dampen demand for devices throughout 2023. In fact, end-user spending on devices is projected to decline 5.1 percent in 2023," said Ranjit Atwal, senior director at Gartner.
End-User Computing Market Development
Just as business confidence was beginning to recover after the worst of the COVID-19 pandemic, it has now fallen significantly in most regions. Moreover, Gartner doesn't expect relief from inflation and the bottom of the recession to occur until the fourth quarter of 2023.
The downward trend affecting the global devices market will lessen the expectation of a pessimistic economic outlook through 2023, eventually increasing both consumer and business spending.
Personal Computer (PC) shipments will continue to record the worst decline of all end-user computing device segments in 2023. PC shipments are estimated to decline 6.8 percent in 2023, after a 16 percent decline in 2022.
Through 2023, PC vendors will reduce inventory levels and Gartner analysts expect PC inventory levels will return to normal by the second half of 2023 after significantly increasing in 2022.
"Inventory levels increased due to vendors overestimating market demand and because of the collapse in consumer confidence and dramatic fall in demand," said Atwal.
In 2022, while many business PCs could upgrade to the Windows 10 operating system, many did not. By the end of 2023, Gartner expects more than 25 percent of business PCs will upgrade to Windows 11.
However, Gartner analysts anticipate that Windows 11 will not drive enough sales to reach the same shipment volumes between 2020 and 2022.
In addition, as high inflation rates and impending recession decrease discretionary spending and budgets, Gartner estimates consumers and businesses will extend their PC and tablet replacement cycles by over 9 months by the end of 2023.
Gartner also forecasts worldwide smartphone shipments to decline by 4 percent in 2023. Smartphone shipments are projected to total 1.23 billion units in 2023 -- that's down from 1.28 billion units in 2022.
"Consumers are holding onto their phones longer than expected, from six to 9 months, and moving away from fixed to flexible contracts in the absence of meaningful new technology," said Atwal.
Outlook for End-User Computing Market Growth
According to the Gartner assessment, device manufacturers and consumer electronics vendors are passing on inflationary component costs to users, dampening demand further. End-user spending on mobile phones is projected to decline by 3.8 percent in 2023.
That said, I believe bloated retail inventories will drive down the prices of most types of end-user computing devices. Expect to see more bargains as manufacturers push their excess devices into all consumer electronics retail channels.
Anyone looking to replace an aging device should research carefully before making a purchase -- to ensure getting the best value for money. In particular, Chromebooks can offer the best price-performance value for PCs. Android smartphones continue to offer the best mobile deals.