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Apple still the brightest point in gloomy global PC market

Mac Studio, Mac mini

Apple continues to be the best stock pick among computer producers, according to Morgan Stanley, with the overall PC market hitting its lowest point in about two decades.

The global PC market has suffered considerably in recent years, with it trying to recover from a horrific holiday season. Amid one report's poor forecast for the industry in 2023, it seems Apple is the only vendor that Morgan Stanley seems quite positive about.

In a Tuesday note to investors seen by AppleInsider, Morgan Stanley says it is reducing its forecasts for the PC market, trimming the 2023 calendar year prediction from 261 million shipments to 249 million. Weakness in both consumer and commercial markets are seen to be worsened by "softer-than-expected demand" and an elevated channel inventory.

"A combination of weaker consumer demand, drastically softer enterprise demand, economic weakness in the US and Europe, and elevated channel inventories globally will result in CY23 PC shipments that we estimate will fall to 249M units (-12.5% year-on-year)," the firm's analysts write.

This will be the lowest annual PC run rate since 2006, and 5% lower than Morgan Stanley's previous forecast.

Furthermore, average selling prices of PCs are now forecast to go down 3% year-on-year, rather than to "give back the 14% growth seen over the last two years," prompted by "lingering inflationary pressures and positive mix shift."

Weaker shipment expectations and a decline in average selling price leads Morgan Stanley to think the total market value will go down to $206 billion for CY2023, 26% down the $279B peak of 2021.

Apple is given the high point of the report, remaining Morgan Stanley's "top pick amongst the global PC OEMs." Apple has the "most significant upside" of 15% in its price target, with Dell the only other one at +11%. On the other end of the scale, Morgan Stanley sees Asustek at -40% and Acer at -43%.

For reference, Morgan Stanley classifies Apple as "Overweight" with a price target of $175. Dell is "Equal-Weight with a price target of $47.