The global PC market is witnessing a notable turnaround, driven by growing interest in AI-powered PCs and a resurgence in enterprise purchases of laptops and desktops. According to early data from market research firm IDC, the market grew by 3%, marking the second consecutive quarter of growth following seven quarters of decline. This growth rate slightly outpaces the 1.9% reported by rival firm Gartner, both indicating a recovery from the slump that followed the pandemic-induced sales boom.
Ryan Reith, IDC’s group vice president, highlighted the challenges still facing the mature technology market but noted that the recent growth, fueled by AI PC hype and a critical commercial refresh cycle, has brought much-needed positivity. “The buzz is clearly around AI, but a lot is happening with non-AI PC purchasing to make this mature market show signs of positivity,” Reith commented.
The PC industry is finally on the path to recovery https://t.co/fFixFaJAHx
— Kamal Mustafa ✪ (@MeKamalMustafa) July 11, 2024
In the early stages of the pandemic, the PC market experienced explosive growth as consumers and businesses rushed to purchase new systems for remote work and entertainment. However, this surge led to a subsequent downturn as the market became saturated. In Q1 2023, Gartner reported a significant 30% year-over-year drop in PC shipments, which slightly improved to a 16% decline in Q2 2023.
As consumers begin replacing the laptops and desktops they bought during the pandemic’s early months, sales are gradually picking up. This recovery is essential for companies like Microsoft, Intel, and AMD, which suffered substantial revenue declines due to the market’s earlier downturn. For instance, Microsoft’s Windows OEM sales fell by 39% in its fiscal second quarter of 2023. Similarly, Intel’s Client Computing Group revenue dropped by 38%, and AMD reported a 65% year-over-year decrease in net revenue in its Client group.
Apple reported a 21% gain in personal computer shipments in the second quarter, the biggest jump among global PC makers as part of a budding industry recovery https://t.co/zaYsno7XLb
— Bloomberg Technology (@technology) July 9, 2024
The industry’s focus is now shifting towards AI PCs as a new growth driver. These PCs are equipped with specialized neural processing units designed to handle AI tasks more efficiently. Microsoft has branded its AI-enhanced computers as Copilot+PCs, featuring technology intended to streamline user experience, such as the Recall feature that captures screenshots to help users pick up where they left off. However, due to security concerns, Microsoft has had to delay the rollout of some features.
Other tech giants like Intel, AMD, Nvidia, and Qualcomm are also investing in the AI PC market. Intel and AMD have introduced AI PC chips, while Nvidia emphasizes the capability of its graphics chips to run AI applications effectively. Qualcomm has launched its latest PC chip in Microsoft’s Copilot+PCs, promising performance comparable to Apple’s MacBook Pro and MacBook Air, including all-day battery life and exceptional processing power.
Despite being a nascent market, the AI PC segment shows promise. Microsoft launched its Copilot+PCs in May, but it remains to be seen how many consumers will choose these AI-enhanced PCs for their specific capabilities versus simply seeking the latest technology. Nevertheless, the upward trajectory of the PC market is a positive sign for manufacturers, signaling a potential end to the prolonged slump.
Key Points:
i. The global PC market is recovering with a 3% growth in the recent quarter, driven by interest in AI PCs and enterprise purchases.
ii. The market faced a downturn after the initial pandemic-induced boom, with significant revenue drops for major companies like Microsoft, Intel, and AMD.
iii. AI PCs, equipped with specialized neural processing units, are seen as the next growth driver, with major tech companies investing in this segment.
iv. Microsoft’s Copilot+PCs, Intel and AMD’s AI PC chips, and Qualcomm’s latest PC chip are key developments in the AI PC market.
v. The industry’s shift towards AI and innovative technologies indicates a positive trend for continued market growth.
TL Holcomb – Reprinted with permission of Whatfinger News
