For much of the pandemic, PCs were like Pelotons: Seemingly everyone needed to buy one.

With many individuals stuck at home and flush with cash, demand for computers skyrocketed. And businesses large and small rushed to arm employees with upgraded PCs to navigate the world of remote work. Even amid the semiconductor shortage, manufacturers like Dell and HP posted huge sales increases.

But as Peloton proved, what comes up must come down: The PC market is entering a dark period of rapid decline in demand, and it could take years to turn things around.

• Purchasing levels are still above what they were pre-pandemic. But the drop-off has been steep, with shipments in the three months through June falling 15.3%, according to IDC. Gartner has similarly dire estimates.
• “Things aren't looking as rosy anymore,” IDC research manager Jitesh Ubrani told me.

It’s not just computers; it’s everything. Inflation is most certainly a factor, as PC prices rise. But after two years of foregoing travel and other leisure expenses, people simply aren’t eager to purchase new items for their home or work.

• That’s evident in the most recent round of quarterly earnings: Airlines are posting big profits despite surging ticket prices, while Zoom struggles to persuade the millions of users it gained during the pandemic to pay a relatively low $150 a year for the product.
• PC makers are also getting hit: “We saw a decline in PC demand as we went through the quarter,” Dell co-chief operating officer Jeff Clarke said on Thursday’s quarterly earnings call with investors.
• The company’s stock dropped nearly 14% on Friday after the company reported weaker-than-expected sales. Shares for HP and Lenovo are also down double-digit percentages from the start of the year amid a broad decline in the stock market.

Outside the pandemic, there are other consumer and business shifts that threaten the dominant status a handful of PC makers have enjoyed over the past few decades.

• Gamers remain a lucrative, but small, segment of the market. And though Microsoft in particular is looking to build a bridge between PC and console with its cloud gaming initiatives, mobile gaming remains on top.
• Some gamers are even taking advantage of the dip in cryptocurrency to buy used GPUs to upgrade their existing machines, according to Ubrani. While hardcore gamers have long sought to build their own machines, the trend appears to be becoming more pronounced.
• “We are unable to accurately quantify the extent to which reduced crypto money contributed to the decline in gaming demand,” Nvidia chief financial officer Colette Kress recently told investors. But “we believe the long-term fundamentals in gaming remain strong.”

There are still bright spots. Demand for lower-end machines like the Chromebook has dropped precipitously. But higher-end machines with beefier price tags are making up some of that difference. In a sign of the demand, HP just unveiled two new PCs that cost over $2,000.

• Many households also purchased additional computers, whether for their children’s school or just to avoid having to lug hardware to and from the office.

And businesses continue to upgrade their IT portfolios, just not at the same cadence as the early days of the pandemic, especially as layoffs and cost cuts hit most organizations. The enterprise segment could also get a boost in the coming years as Microsoft phases out support for Windows 10, forcing users to upgrade to Windows 11 — or even move to a new operating system.

• That explains why Apple has for years tried aggressively to push deeper into the enterprise market. The vendor, which still lags behind Lenovo, HP and Dell, has been something of a wild card.
• The M2 chip could be the ticket Apple needs to enterprise stardom. But toppling larger rivals that are much more entrenched within businesses will be difficult — particularly as companies look to curb spending.
• “It’s still a much more expensive device,” said Raymond James managing director Simon Leopold.

Many of us will continue to be tethered to our computers for many years to come. How often we opt to upgrade those devices, however, and which products we choose to invest in could change considerably.

Dell, HP and others will continue to make a hell of a lot of money from consumers and businesses alike. But, like with Zoom, Peloton and the rest, the glory days of the PC market surely hit their peak during the pandemic. And, like one famous New Jersey native famously sang, they’re bound to pass you by.

— Joe Williams