Manufacturing PCs is not a high-margin business. There's a lot of competition, and outside of specialty segments like gaming PCs, there's not much differentiation. A mainstream laptop from HP (NYSE: HPQ) is going to be very similar to a mainstream laptop from Dell or Lenovo .
The pandemic flipped the PC industry on its head. Insatiable demand, driven by working and learning from home coupled with supply chain constraints and shortages, created a bonanza for HP and other PC manufacturers. Not only did sales soar, but so did profits. At its quarterly peak, the adjusted operating margin in HP's personal-systems segment topped 8%.
That's not normal, and it was never going to last . Historically, HP managed operating margins closer to 4% in the PC business. Margins could be a bit higher during periods of strong demand, but a doubling of margins was a pandemic anomaly.
For further details see:
HP's PC Profits Fall Back to Earth