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PC demand sees steepest decline in 9 years

Yahoo Finance’s Daniel Howley joins the Live show to discuss reports that PC demand has slowed by the fastest rate in nine years.

Video transcript

- Well, the global PC market saw its sharpest decline in nine years during Q2, a sign that pandemic demand has cooled quite a bit. Let's bring in Yahoo Finance's Dan Howley on this. Dan, this has been a common theme, especially among the chip makers, like Intel. We've seen a big decline in PC demand.

FAN HOWLEY: Yeah. And this kind of comes on the heels of the earnings announcements from both Intel and AMD. We're expected to get Nvidia later this month. So the initial boost we saw from PC sales at the early part of the pandemic and the peak of the pandemic really were driven by people who didn't necessarily have computers or didn't need computers of their own. They were relying more on their office computers or school computers, or even using their smartphones for everyday work, whether that's sending emails or things along those lines.

But then, obviously, the pandemic hit. Everybody realized, oh, man, I need to do work, and I don't have a computer. So we saw a huge increase in the number of people going out and purchasing PCs or ordering PCs. Now, it's rebounded to the point where we're kind of circling the time frame where everybody was buying computers, laptops, desktops, and the comparisons are just starting to fall flat, and off a cliff, frankly.

We're still not-- we're still above pre-pandemic levels as far as sales go, but they're falling very fast. And if you look at something like IDC, for instance, they say that PC shipments fell 5.1% in Q1 this year. Fast forward that to Q2, and they're down 15.3%.

So you can see this kind of starting to pile up. And prior to the pandemic, we had seen declines year over year in PC sales for some time. So this really just was destined to happen. This wasn't going to be a long-term boom for PC sales. People just are going back to the way that they normally lived.

And we're seeing that with different types of entertainment throughout the industry. I talked earlier this week about video games and how that industry is seeing sales kind of fall back down to Earth from their pandemic highs. So it was just, essentially, inevitable that we would see this with PC sales dropping.

- Dropping like a rock. Yahoo Finance's Dan Howley, thanks so much. Have a great weekend.