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Global PC Shipments Fall 15% YoY in Q2 2023, Record First QoQ Growth After Q1 2022

Global PC shipments fell 15% YoY in Q2 2023 but rose 8% QoQ.
PC OEMs’ rankings remained unchanged.
HP and Apple reported relatively resilient performance.
We maintain a double-digit YoY shipment decline outlook for 2023.
Global PC shipments will return to pre-COVID-19 levels in H2 2023.

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – July 14, 2023

Global PC shipments fell 15% YoY in Q2 2023 but rose 8% QoQ, according to Counterpoint’s PC tracker service. Although the inventory levels continued to normalize in Q2, another double-digit YoY decline was recorded after the 28% YoY decline in Q1. Therefore, the YoY decline in Q2 can be seen as relatively stabilizing the shipment downturn since Q1 2022. Also, the QoQ growth in Q2 was the first since Q1 2022. The shipment numbers of Q2 can be considered an early sign of stabilization in the PC market. We can expect a mild recovery in H2 2023 due to the absence of solid growth drivers.

Source: Counterpoint Research

Vendors except HP and Apple suffered double-digit shipment declines

Lenovo’s solid #1 place in shipments remained unchanged in Q2, though the company still experienced an 18% YoY decline due to persistent soft demand in some markets. The double-digit sequential growth is a sign of normalizing demand and healthier inventory levels.

HP’s 22% market share was the highest since Q2 2021, while its resilient shipment numbers were a mix of early inventory correction and incremental Chromebook orders.

Dell reported sequential shipment growth in the quarter but a double-digit YoY decline due to overall demand weakness.

Apple saw a high single-digit shipment growth when compared to last year. The growth was largely due to the relatively low Q2 2022 and partially due to new product launches.

Negative factors are weakening in H2 2023

Though the global PC market shipments saw their first QoQ rise after Q1 2022 in Q2, according to Counterpoint’s Macro Index Tracker, the market may have to experience some turbulence in the second half of this year before seeing the first sunrise. Based on our checks, the end demand has picked up to become stronger than OEM shipments (sell-in), which would likely translate into accelerating re-order demand. In H2 2023, we are expecting back-to-school momentum to strengthen sales numbers coupled with potential AI-enabled and Arm laptop launches. Overall, the market is stepping away from the lull and moving toward a new post-COVID-19 normal.

Source: Counterpoint Research

Global PC shipments to return to pre-COVID-19 levels in H2 2023

We expect the QoQ rebound seen in Q2 2023 to sustain throughout the rest of the year. However, we reiterate our cautiously optimistic view on shipment performance in H2, as we still expect the shipments to decline YoY in the coming quarters before ultimately regaining their growth momentum. Therefore, we maintain our outlook of a double-digit YoY shipment decline in the 2023 full year. But the shipments will return to pre-COVID-19 levels in H2 2023.

We believe the PC inventory will enter 2024 at a healthy level after two more quarters of adjustments. Replacement demand, AI-enabled models and Chromebook renewal could be potential growth drivers even as we keep a close eye on enterprise expenditure plans.

New Layer-1 Accelerator Cards Set To Boost Open RAN Market – Or Create More Lock-In?

The transition of the Radio Access Network (RAN) from a standalone, integrated network into a disaggregated, virtualized solution is well underway. However, all open RAN deployments to date rely on Intel’s x86-based COTS servers, with most deployments also using Intel’s proprietary FlexRAN software architecture. Recently, various silicon vendors have announced that they are developing alternatives to Intel’s x86 platform based on ASICs, GPUs as well RISC-V architectures. Several of these vendors are currently testing their new PCIe-based Layer-1 accelerator cards with CSPs and commercial versions of these products are expected to become widely available during the next three years.

This report provides an overview of the emerging open RAN PCIe-based Layer-1 accelerator card market based on new merchant silicon and highlights the opportunities and technical challenges facing the open RAN chip community as they strive to develop alternative chip solutions capable of efficiently processing real-time, latency-sensitive Layer-1 workloads.

Key Takeaway No. 1: Too much diversity?

The launch of new L1 accelerator cards from various vendors, large and small, should be welcomed by CSPs calling for diversity and will go some way to quell criticism that the open RAN market is too Intel-based. However, CSPs may now be faced with another dilemma – too much choice! They must now face the difficult challenge of testing and comparing multiple accelerator cards, inevitably involving complicated technical and commercial trade-offs.

Key Takeaway No. 2: Look-Aside or In-Line Accelerators?

At present, the choice of accelerator architecture is binary: either look-aside or inline. Both types have their advantages and drawbacks. Depending on use cases and applications, Counterpoint Research believes that operators may need to use both types of accelerators. However, only one vendor currently offers a software/silicon platform with the capability to do this.

Key Takeaway No. 3: Interoperability and Vendor Lock-In

Developing commercial-grade Layer 1 software suitable for massive MIMO networks is an expensive process requiring very specific skills and a lot of experience – but with no guarantee of commercial success. Although open RAN is designed to promote interoperability and vendor diversity, all L1 stacks are currently tied to the underlying silicon architectures and hence are not portable between hardware platforms. This introduces a new form of vendor lock-in for CSPs. Clearly, there is an urgent need for an universal software abstraction layer between the L1 stack and the various hardware platforms to enable stack portability.

The complete versions of these Key Takeaways, including the full set of Takeaways is published in the following report, available to clients of Counterpoint Research’s 5G Network Infrastructure (5GNI) Service.

Report: New L1 Accelerator Cards Set To Boost Open RAN Market – Or Create More Lock-In?

Table of Contents

Snapshot
Key Takeaways
Introduction
PCIe-based Hardware Acceleration
- Look Aside vs In-Line Acceleration
- Technical Trade-Offs
Processor Architectures
- Types of Processors
- Comparison of Hardware Options
- Intel’s Xeon with vRAN Boost
Layer-1 Stacks
- Reference or Commercial Grade Stacks?
- Open or Closed Stacks?
- Layers 2 and 3

Interoperability and Standardization
- FAPI Interface
- Proprietary L1 Software Stacks
- Accelerator Abstraction Layer (AAL)
- Saankya Labs RANwiser
Key Players (in alphabetical order)
- AMD Xilinx
- Dell
- EdgeQ
- Intel
- Leapfrog Semiconductor
- Marvell
- Nvidia
- Picocom
- Qualcomm
Viewpoint

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Q1 2023 Global PC Shipments Mark Another Quarterly Decline, Gradual Recovery Expected in H2

Q1 2023 global PC shipments fell 28% YoY.
Inventory digestion likely to end in Q2 2023.
Although PC demand is expected to gradually recover in H2 2023, full-year shipments are set to decline by double-digit percentages.
Windows 11, commercial/flagship models and replacement cycles are key 2024 growth drivers.

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – April 17, 2023

Global PC shipments fell 28% YoY in Q1 2023

Global PC shipments dropped 28% YoY in Q1 2023 to hit 56.7 million units, the lowest quarterly numbers in the past 10 years, excluding Q1 2020 when the COVID-19 pandemic outbreak interrupted manufacturing and production. The Q1 2023 decline was due to the continued delay in demand pickup amid an inventory correction during the quarter. However, we are cautiously optimistic and believe the overall PC market will start gradually recovering in the latter half of Q2 2023 which will pave the way for comparably stronger momentum in H2 2023.

Global PC Shipments by Vendor, Q1 2023

The last mile of inventory digestion since mid-2022

The PC and PC components’ inventory issue has remained for more than half a year due to frozen demand and aggressive double booking. As we have already entered the post-pandemic era and are settling in with the new work environment and lifestyle, the PC industry has also adapted a lot with incremental demand from each consumer. However, increased devices per person do not imply continuous high-level demand for PCs, especially during economic downturns. Fortunately, based on feedback from OEM/ODMs, we are close to the end of PC inventory digestion which is expected by H1 2023. PC OEMs could begin executing their next step of PC strategies as consumer demand is gradually increasing.

Major OEMs, especially Apple, had a tough time in Q1 2023

Lenovo remained the world’s largest PC vendor in Q1 2023, despite a huge decline in shipments during the quarter. The company registered shipments of 12.8 million units in Q1 2023 and a market share of 23%. HP reported a relatively narrow adjustment in the quarter off a lower base in the year-ago period, maintained its second rank and retained its 21% market share. Dell’s better-than-expected performance in the US helped the company rank third in terms of global PC shipments during the quarter with a 17% market share. Apple suffered the most, marking a 38% YoY decline in shipments due to a higher base in the year-ago period and a longer replacement cycle.

We foresee slow-paced demand recovery

It is widely expected that PC demand will recover in H2 2023. PC OEMs are also looking forward to a pickup in demand following the inventory digestion. Although we did say that demand will recover post-inventory normalization, we are afraid demand recovery will take slightly longer to start accelerating. On the other hand, we believe the rate of demand recovery will vary across different categories. Based on our checks, demand for commercial segments and premium/flagship consumer product lines will likely recover faster than others and are expected to sell better in H2 2023. Arm laptops continue to be relatively vulnerable due to a lower shipment base a year ago and are more eye-catching to customers.

Inventory Correction Continues while YoY decline improves

Another YoY double-digit percentage shipment contraction is expected in 2023

Although OEM vendors reported another quarterly shipment decline in Q1 2023, they maintain a cautiously-optimistic tone for PC demand in H2 2023. We further adjust our 2023 global PC shipments forecasts and expect to see a double-digit percentage shipment decline throughout 2023 from the original high single-digit percentage shipment decline at the end of 2022. Additionally, we expect a bright 2024 due to renewal demand from Chromebook and Windows 11, coupled with a replacement cycle since the outbreak of the COVID-19 pandemic.

Global PC Shipments See Record YoY Decline in Q4 2022

Global PC shipments fell 27.8% YoY in Q4 2022 to reach 65.2 million units.
For the full year of 2022, the shipments declined 15% YoY.
Macroeconomic headwinds, increasing inflation pressure and frozen PC demand affected the global PC market in 2022.
Soft demand in H1 2023 will cause heavy pressure on shipments. Therefore, we do not see annual shipment growth in 2023.

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – January 19, 2023

Global PC shipments left Q4 2022 with a record-high YoY decline of 27.8% to reach 65.2 million units, according to Counterpoint Research’s data. Although inventory levels of several OEMs and ODMs likely peaked in Q3 2022, the year-end season failed to accelerate the PC shipment momentum in Q4. At 286 million units, the total PC shipments for 2022 also reflect a muted global PC demand with four consecutive quarters of YoY shipment declines. Therefore, we are not expecting a decent rebound in H1 2023.

Macroeconomic headwinds, increasing inflation pressure and frozen PC demand affected the global PC market in 2022, with shipments declining 15% YoY. Besides, consumers who bought new PCs were still enjoying the latest models, whereas enterprises were working more carefully on their budgets. Also, the lack of appealing functions and financial support could not bring in incremental demand in 2022, not to mention the aggressive inventory digestion target of OEMs since H1 2022.

Record YoY Shipment Decline in Q4 2022

Source: Counterpoint Research

Lenovo continued to lead the market in Q4 2022 but with a flattish 23.7% share. Mild inventory correction dragged the company’s performance amid a lackluster holiday season. Its shipments declined 17% YoY in 2022 to take a 23.7% market share. We expect Lenovo’s shipment decline to normalize along with demand revival in the Chinese market in 2023.

HP secured its second place in Q4 2022 with a 20.3% share. Its shipments declined 29% YoY during the quarter but it was the only major PC OEM to report positive sequential shipment growth in Q4, thanks to improving shipment performance in North America and a lower base in Q3. HP had the largest shipment pullback in 2022 due to weak consumer demand across the globe. The company ultimately recorded a below 20% market share in 2022. But we expect a meaningful share rebound in 2023.

Dell’s 16.7% market share was the lowest in the past seven quarters largely due to an enterprise demand slowdown. As the economic situation remains weak, the company is not expected to see rapid pick-up for commercial models in 2023, which is crucial for Dell to narrow the market share gap with HP. Therefore, we may see pressures on Dell’s share (17.4% in 2022) and shipment performance in 2023.

Apple’s comparatively tiny 3% YoY shipment decline in Q4 2022 helped the company close the book with a flattish shipment volume performance for 2022. Apple kept gaining market share at the expense of x86-based vendors and recorded a double-digit share in the second half of 2022 and 9.4% in the full year. Arm-based M-series models helped the company weather the slump cycle in both consumer and commercial devices in 2022.

Global PC Shipments by Vendor, Q4 2022

Source: Counterpoint Research

Windows on Arm a key focus in 2023

Despite near-term headwinds, we could still see global PC shipment volumes higher than pre-COVID levels in the coming years, thanks to the continuous work environment and lifestyle changes and delayed procurement from both consumer and commercial sectors after H1 2023. Consumer demand will likely see gradual rebound in H2 2023 followed by a slower warm-up in enterprise procurement. Soft demand in the first half will cause heavy pressure on global PC shipments. Therefore, we do not see annual shipment growth in 2023.

Eying Apple’s M-series success, Qualcomm’s Arm-based Oryon CPU will likely enter the market and heat up Windows-on-Arm momentum in 2023. We see mid-single-digit YoY shipment growth for Arm-based laptops compared to the global laptop market’s high-single-digit shipment decline in 2023.

Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Global PC Shipments’ Double-digit Crash in Q3

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – October 25, 2022

Global PC shipments fell 15.5% YoY in Q3 2022 to reach 71.1 million units recording another wave of huge YoY declines after the severe annual and sequential falls in Q2, according to Counterpoint Research data. The Q3 2022 decline was largely due to demand weakness across both consumer and commercial markets, which was mainly driven by global inflation. Despite components shortage issues being largely resolved, OEMs and ODMs are holding a relatively conservative view on Q4 2022 and first half of 2023.

The lull in PC demand continued in the quarter despite broad promotional activities from major OEMs, especially for consumer product lines. In addition, inventory digestion processes have been activated to deal with abnormally high levels as we enter the second half of the year. Although it is the season of peak consumer device sales, PC OEMs believe the destocking process will continue into 2023. Based on our conversations with supply chain members, especially with components suppliers, the largest inventory numbers were in Q3 2022 and will likely begin to decline in coming quarters but there is uncertainty within the supply chain on when shipment growth will restart.

Global PC Inventory Accumulation Since 2022

Source: Counterpoint Research

Lack of consumer demand in the back-to-school season, shrinking enterprise purchasing due to economic uncertainty and increasing promotional events all created a drag on Average Selling Price (ASP) growth momentum and also impacted PC market revenue.

Apple reported a counter-market 7% YoY shipment growth amid muted market momentum, thanks to its new product launch in late Q2 with shipments refilled after the China lockdowns in Q2 that interrupted ODM manufacturing schedules. Meanwhile, Asus reported a 9% YoY shipment decline in the quarter, reflecting a relatively resilient performance due to its enterprise focused strategy, in line with management’s target of outperforming shipment in 2022.

Lenovo booked a 16% YoY decline, largely in-line with the global PC market, consumer demand weakness was partly offset by enterprise spending. Its 23.7% market share remains flattish compared to last year, reflecting Lenovo’s strong position efforts to cope with a shaky market.

HP took an 18% share in Q3 with 12.7 million unit shipments. This is the second quarter of lower than 20% market share by HP since 2016, largely due to its higher consumer mix, which meant it exited Q3 with a 26.5% YoY decline.

Dell also reported more than a 20% YoY shipment decline with and 17% market share. Its 12 million units were a bit higher than Q3 2020, right before Dell began to benefit from working style changes post the initial waves of COVID.

Global PC Shipment by Vendor, Q3 2022

PC market unlikely to grow until H2 2023

Overall, global PC shipments in the second half of 2022 will still be comparatively higher than the level before Covid broke out. However, Chip maker AMD claimed that PC market weakness already caused negative impacts to its results and outlook; while the management of Taiwan OEMs Acer and Asus, both shared their views that the PC industry will not recover until H2 2023.

Looking into 2023, the sky is still covered by dark clouds. We are also adjusting our 2022 shipment forecast to a 13% YoY decline on soft PC demand. Among all PC product segments, we believe Arm-based PCs and gaming PCs are poised to weather the market downturn best, with the help from Apple’s M-series offerings as well as incremental R&D efforts from chip makers and the wider ecosystem.

Global PC Shipments in Q2 2022 See Largest YoY Decline Since Q2 2013

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – July 27, 2022

Global PC shipments fell 11.1% YoY in Q2 2022 to reach 71.2 million units and record the largest YoY decline since Q2 2013, according to Counterpoint data. The Q2 2022 decline was largely due to lockdowns in China’s Shanghai and Kunshan, which hit the PC supply chain. However, as the OEMs’ inventory continues to accumulate amid lackluster consumer demand globally, we believe supply issues will likely get resolved in the second half of this year.

Diminishing YoY PC Shipment Growth Since Q1 2021

Source: Counterpoint Research

The macroeconomic turbulence continues to impact worldwide consumption momentum. Regional conflicts as well as global inflation have resulted in a downward sloping demand and consumer spending. Enterprises too are putting off their new purchases and device upgrades, though the orders from the commercial segment have remained more solid compared to the consumer segment. By region, the US and EU experienced relatively huge double-digit YoY declines in their Q2 2022 shipments, mainly dragged by Chromebook demand correction and soft consumer demand, as these regions had started seeing shipment growth ahead of other regions last year.

On the other hand, lockdowns in China during the quarter hit hard the laptop supply chain, as major laptop ODMs, including Quanta, Compal and Wistron, suffered manufacturing disruptions. The most harmful impacts were in April and May when we saw approximately 40% and 20% YoY declines respectively for key ODMs. Production lines resumed normal operations in the second half of May and were trying to clear order backlogs.

Major Laptop ODMs’ Inventory Levels (in $ mn)

Source: Counterpoint Research

Even though the top three brands showed a YoY decline in Q2 shipments, they all managed to keep their rankings unchanged. Lenovo maintained its leadership in the global PC market with a 24.4% share in Q2 2022. The brand’s total shipments fell 12.7% YoY to 17.4 million units mainly due to weak consumer demand, partly offset by moderate commercial orders.

HP suffered the most among the top brands in Q2 2022, reporting a 27% YoY decline in shipments from a high base last year. The sharp decline was mainly due to soft momentum for consumer products and Chromebooks. On the other hand, Dell had the smallest adjustment to its YoY shipment performance, thanks to a commercial/premium-focused product strategy.

Acer saw a 14.8% YoY shipment decline off a relatively high base in Q2 2021. Despite Chromebook weakness continuing to cap Acer’s growth momentum, its market exposure in entry- to mainstream-level laptops helped the brand take fourth place in global PC shipments in Q2 2022.

Apple reported a sharp decline of 20% YoY in its Q2 shipments largely due to supply chain disruption at Quanta’s manufacturing lines in China. The consumers too were waiting for a new MacBook series equipped with M2 chips. As a result, the company lost its fourth place in the global PC rankings for Q2 2022.

Asus’ Q2 shipments were down 7.7% YoY thanks to its commercial segment focus in recent quarters combined with consumer spending weakness entering 2022. The brand’s total shipments of 4.7 million made it share the fifth position with Apple in Q2 2022.

Global PC Shipments by Vendor, Q2 2022

More shipment adjustments seen

We had cut our 2022 shipment forecast in Q1 2022 to reflect the beginning of a weakening PC demand. But with persistent inflation pressure and enterprise spending saturating, we expect order adjustments to continue even as the average selling price plateaus on easing supply constraints. Therefore, we are revising our forecast for the 2022 PC shipments to a 9% YoY decline, with potential bright spots of new M2 MacBooks and desktop demand rebounding after the post-COVID-19 reopening of offices.

Global Server Revenues to Grow 17% YoY in 2022

Global server revenues will grow 17% YoY in 2022 to reach $111.7 billion.
Global server shipments will rise 6% YoY in 2022 to reach 13.8 million units.

New Delhi, Boston, Toronto, London, Hong Kong, Beijing, Taipei, Seoul – June 7, 2022

The global server market’s revenue will grow 17% YoY in 2022 to reach $111.7 billion, according to Counterpoint’s Global Server Sales Tracker. From an enterprise perspective, transformation to hybrid cloud and upgrades of existing infrastructure to handle increased workloads will provide growth impetus after a pause during the COVID-19 pandemic. 5G, automotive, cloud gaming and high-performance computing will remain the key drivers for cloud service providers in data center expansion.

The market is evolving with the introduction of “As-a-Service” and “pay per use” models by server companies, like Pointnext from HPE, APEX from Dell and TruScale from Lenovo. The business model pivot has been enjoying great success due to more flexibility given to the customer at minimum capital expenses due to the emergence of workload-based infrastructure.

Looking at the overall market, Research Analyst Akshara Bassi said, “In an inflationary but extremely dynamic environment, companies are looking to strengthen their infrastructure as they prepare for Web 3.0 demands from the infrastructure end. Companies are diversifying their IT infrastructure to meet the needs of data evolution and making customers cloud-ready.”

Global Server Market Observations, 2018-2021

Revenues were flat in 2020 and early 2021 owing to the pandemic and less spending by enterprises on IT infrastructure upgrades and expansion.
In H2 2021, there was a backlog due to supply chain disruptions across the whole value chain from accelerator chips to power ICs, which has trickled into H1 2022.
The demand in 2021 picked up due to investments by hyperscalers in the fields of supercomputing, edge computing and 5G deployment. From an enterprise perspective, the upgrades and expansions happened to enable digital transformation along with cloudification of processes.
The shipments rose at a single digit owing to better attach rates and higher configurations within the servers.
Higher compute and storage requirements by customers along with supply chain disruptions raised the average unit price considerably for the server units.

Commenting on the server market, Bassi said, “Dell and HPE are the server market icons but are seeing companies like Lenovo, Inspur and Supermicro giving strong competition as demand for flexible customised configurations in bare metal option continues to rise.”

ODM Direct grew at a higher pace by 3 percentage points than the overall market for 2021 indicating shift towards ODM direct as choice of hardware for large scale Data Center deployments. Foxconn and Quanta have been gaining significant market share over the years as hyperscalers continue to expand and favor ODM Direct for their data center orders.

Key Market Drivers, 2022

Edge servers: Edge server configurations will be a key driver of growth in server shipments as companies start enabling chip-to-cloud features within the devices and 5G deployments make IoT use cases penetrate across all verticals – consumer, industrial, healthcare and banking.
Metaverse: The infrastructure spends to enable the Metaverse will give an impetus to servers as they are the building blocks of the Metaverse. Major internet corporations and hyperscalers have already detailed their plans for spends on Metaverse infrastructure.
Supercomputing: Many enterprises are building their own supercomputers to develop software that can unleash Web 3.0 on consumers. From a government perspective, supercomputers are becoming ubiquitous in every research department within it – from being used only in defense initially to climate and healthcare now.
Cloudification of services: Many services are increasingly becoming cloud-based offerings as opposed to device-based earlier, with device storage and compute needs being taken care of by cloud-based services. Data centers, and thereby servers, are an integral part of the infrastructure needed to enable these services.

Note: ODM Direct constitutes sale to hyperscalers and whitelabel device sales to Enterprises directly.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Akshara Bassi

Dale Gai

Neil Shah

Follow Counterpoint Research

Global PC Shipments Down 4.3% YoY in Q1 2022; Component Shortages Likely to Ease in H2

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – April 28, 2022

Global PC shipments fell 4.3% YoY in Q1 2022 to reach 78.7 million units, according to Counterpoint Research Global PC tracker. Entering 2022, the PC supply chain experienced easing component shortages and logistics issues compared to the second half of 2021. Order backlog from 2021 continued to contribute substantially to PC shipments in the beginning of 2022. This supports our previous view of another PC shipment plateau in 2022.

Our checks suggest the PC supply chain turned relatively conservative on shipment outlook in the middle of Q1 2022, largely dragged by global inflation and regional conflict, which brought uncertainties to PC demand and blurred the overall PC shipment momentum ahead. The overall PC shipments in 2022 are expected to be shy of our forecasts made at the end of 2021.

In addition, COVID-19 lockdowns in China, especially in Shanghai and Kunshan, where many laptop manufacturing lines are located, will cause shipment correction in April. Compared to OEMs, ODMs currently face more issues related to manufacturing resource allocation than component shortage impacts.

Global PC Shipments by Vendor, Q1 2022

Lenovo maintained its lead in the global PC market in Q1 2022 with a 23.1% share, which was down a little compared to 2021. The brand’s total shipments of 18.2 million units were down 9.5% YoY. Lenovo performed well during the pandemic largely due to its in-house manufacturing and operation control. This advantage will continue to help the company in times of demand uncertainty or component supply issues.

HP took a 20.2% share to capture the second spot. The company saw a 16% YoY decline in shipments largely due to Chromebook losing momentum and consumer demand weakness.

Dell, on the other hand, posted a slight increase in its shipments in the first quarter of 2022, riding on the commercial/premium product strategy tailwinds. Dell’s market share expanded by around 100 bps in Q1 2022.

Apple continued its success with the M1 MacBook series to see 8% YoY shipment growth in Q1 2022, which boosted its market share by 100 bps YoY. Asus saw 4% YoY shipment growth thanks to its gaming and commercial products expansion. Acer continued to struggle due to Chromebook sales losing momentum and ended the quarter with a 1% shipment decline. Asus and Acer both had ~7% market share in the quarter.

Component shortages likely to ease in H2 2022

In the past two years, the PC supply chain has spent much effort dealing with demand uncertainties caused by COVID-19 and component shortages. But since late 2021, demand-supply gaps have been narrowing, signaling an approaching end to supply tightness across the broader ecosystem. Among all PCs and laptops, the supply gap for the most important components such as power management ICs, Wi-Fi and I/O interface IC has narrowed. We have seen OEMs and ODMs continuing to accumulate component inventory to cope with uncertainties arising from COVID-19. Combined with the abovementioned consumer and Chromebook demand weakness, we believe component shortages are going to ease in H2 2022.

PC Component Shortage Outlook for 2022

Open RAN: Again A Hot Topic At MWC in 2022

As expected, open RAN turned out to be a hot topic at MWC again this year with around 46 demos of O-RAN technology. On the operator side, there were a number of notable announcements from major legacy operators in Europe as well as NTT DoCoMo in Japan demonstrating continued progress towards more open RAN deployments.

Vodafone: 30% open RAN by 2030

Vodafone recently switched on its first open RAN 5G site, the first such site in the UK and also the first macro open RAN site in the UK. The base station uses Samsung’s vRAN technology platform including the vendor’s own radios, with Intel Xeon based servers from Dell running a Wind River cloud platform. Capgemini Engineering and Keysight Technologies are providing the testing and acceleration. Vodafone announced that open RAN 4G and 5G antennas will be deployed from mid-2022 once interoperability tests have been completed.

Vodafone reiterated its plans to have 2,500 open RAN sites live by 2027 (the deadline for removing Huawei RAN infrastructure) and claims that 30% of all its European sites will be using open RAN by 2030.

Telefonica: small cell open RAN

Telefonica is the only other European operator to announce a major commitment to deploy open RAN. The Spanish company has announced that it will build out open RAN pilot sites in its core markets of Brazil, Germany, Spain and the UK to around 800 sites and that open RAN will constitute 50% of all new base stations by 2025. At MWC, the operator announced that it had deployed open RAN small cells in Munich, using radios from Airspan Networks, Altiostar’s vRAN software and NEC providing overall integration services. Telefonica plans to use open RAN based technology to provide densification of its 5G network in Germany.

Orange: 2030 2G/3G switch-off target

Orange has already announced some ambitious goals declaring that all new hardware sourced by Orange in Europe should have open RAN interfaces from 2025 onwards. At MWC, the operator announced that it intends to switch-off its 2G and 3G networks by 2030. This involves phasing out 3G in Europe, except in its domestic market with 2G following by 2030. In France, 2G will be switched off by 2025 and 3G by the end of 2028.

Deutsche Telekom – open RAN mMIMO tests

Deutsche Telekom announced that it has deployed mMIMO radios using the O-RAN fronthaul specification at its O-RAN Town, a small open RAN test deployment outside Berlin. The operator is also the lead company behind a new open RAN testing lab called “i14y” with the aim of accelerating the deployment of open RAN and other disaggregated network architectures.

NTT DoCoMo: OREC and Shared Lab

NTT DoCoMo probably has the longest history of deploying open RAN having deployed the technology in its 4G networks several years ago. It now claims that it has around 10,000 open RAN base station sites as well as being the first operator to launch a commercial open RAN 5G service.

Although not physically present at MWC, NTT DoCoMo provided details of its latest open RAN initiatives, including its open RAN ecosystem (OREC), which currently consists of 13 vendor partners: AMD, Dell, Fujitsu, HPE, Intel, Mavenir, NEC, NTT Data, Nvidia, Qualcomm, Red Hat, VM Ware and Wind River – an interesting cross-section of competing vendors. The company hopes that OREC will accelerate open RAN deployments around the world.

The operator also provided an update on its Shared Lab initiative, essentially a vRAN testbed, which enables different combinations of open RAN components to be tested together. Counterpoint Research believes that NTT DoCoMo probably has more experience of open RAN interoperability testing than any other operator. At MWC, it announced that it was opening up its Shared Lab to other operators across the world. This will eliminate to need for other operators to build their own in-house labs, potentially saving time and money. Interestingly, the facility is available virtually and this was demonstrated at MWC. During 2022, NTT DoCoMo plans to accelerate its Shared Lab activities and is currently in discussions with other operators, notably South Korean operators, including Korea Telecom.

Viewpoint

As the announcements at MWC show, there is an increasing momentum behind open RAN from some of the biggest operators in Europe and Japan, with progress being made in overcoming the key challenges of interoperability testing and integration.

Resolving other challenges, such as performance, i.e. capacity and power consumption issues, will depend upon the availability of new merchant silicon solutions, which will dictate whether mMIMO radios can be used in open RAN networks. Commercial availability (from one vendor, Marvell) is only expected to start at the end of 2022. Although providing a major performance improvement compared to current Intel FlexRAN-based systems,* it remains to be seen how these first-generation, horizontally disaggregated systems compare with the best integrated systems from the likes of Huawei, Ericsson and Nokia. As a result, it is likely that the majority of open RAN deployments will still be non-mMIMO deployments during the next 2-3 years.

In many cases, open RAN deployments will also depend upon the pace of 2G/3G switch-off and the need to avoid disruption to customers as legacy platforms are phased out. Hence the targets set by operators may well be missed. In addition, Counterpoint Research doubts that the cost of open RAN multi-vendor networks will turn out to be lower than single-vendor networks, as the need for integration and interoperability testing represents significant additional costs. Cheerleaders aside, the mainstream adoption of disaggregated networks will only happen when the operational benefits and flexibility offered by open RAN (and proprietary vRAN alternatives) outweigh and compensate for the hardware, power and system integration costs, while attaining the same high-level of network performance.

*Intel is fighting back – with new initiatives on several fronts, including with Cohere Technologies!

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Global PC Shipments up 3.1% YoY in Q4 2021; Component Supply Improving

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – January 20, 2022

Global PC shipments reached 90.3 million in Q4 2021 to maintain their YoY growth momentum at 3.1%, coming on a relatively high base in 2020. The situation on the component supply and logistic fronts continued to improve but at a slow pace. The shipment forecast for Q1 2022 remains optimistic, mainly due to a solid demand and improving component supply. OEMs and ODMs are also expecting some easing of pressure on PC components.

In Q4 2021, the supply gap for the most important PC components, such as power management IC, Wi-Fi and I/O interface IC, narrowed. We believe both OEMs and ODMs will continue to accumulate component inventory to cope with uncertainties cropping from COVID-19. Therefore, we do not see any big risk to PC shipment numbers due to supply backlogs.

Global PC Shipments by Vendor, Q4 2021

Lenovo continued to lead the global PC market in Q4 2021 with a 24% share, slightly shy of its share in Q4 2020 but still having its highest unit sales in 2021 at 21.7 million. HP took a 20.5% share with 1% YoY growth driven by the easing of component shortage. Dell posted a 15% YoY growth in the quarter riding on the strong momentum from its commercial/premium product strategy. Apple’s shipments in Q4 2021 remained largely unchanged thanks to the M1 Macbook’s success. On the other hand, Asus saw a single-digit YoY growth in Q4, while Acer saw a single-digit YoY decline with market shares of 6.8% and 6.7%, respectively.

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Analyst Contact:

William Li

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