Report: AI PCs Won’t Help the PC Industry This Year

Last month, IDC reported that it expects the PC market to grow just 2.6 percent in 2024 outside of China. And the predictions for so-called AI PCs—some of which Microsoft is marketing as Copilot+ PCs—isn’t going to help. A more recent update, delivered via Bloomberg, claims AI PCs will make up less than 3 percent of PC unit sales this calendar year.

If IDC’s numbers are true—and, to be clear, they are only predictions—then PC makers will ship less than 8 million AI PCs in 2024, compared to 260.2 million for the overall PC market. By comparison, PC makers shipped a bit over 250 million PCs in 2023, though IDC’s estimate for last year was 259.5 million units. So IDC believes the PC market will basically be flat year-over-year, with consumer PC sales falling 1.1 percent.

It’s not all bad news. Qualcomm saw its share of PCs sales surge from nothing to 20 percent in June, thanks to the launch of the first Snapdragon X-based Copilot+ PCs. And IDC says that while AI PCs won’t drive shipment volume in 2024, they will “fuel an increase in average selling prices (ASPs)” that will help PC maker margins.

But as is obvious to anyone who’s used one of these PCs, the selling point has little to do with AI: Instead, it’s all about battery life and efficiency. And that will likely remain true for some time because developers have resisted pleas from Microsoft and Qualcomm to build on-device AI capabilities into their apps. Instead, major app developers like Adobe, which has embraced AI, are sticking with cloud-hosted capabilities that benefit everyone, regardless of which type of PC or device they have.

Microsoft says that app developers have shown “great enthusiasm” for the on-device AI capabilities that require Copilot+ PCs (or AI PCs). But the few third-party apps that do support these features are typically made by smaller, less well-known companies.

And it’s only a matter of time before more traditional PC chipmakers, especially Intel, enter the market for Copilot+ PC-class PCs based on their more powerful and compatible hardware. Intel, for all its problems recently, is still a dominant force in the PC market, and it has good name recognition with consumers.

But Qualcomm knows it’s a small fish playing in Intel’s big pond: Bloomberg reports that it has upped the marketing co-payments it makes to PC makers to help combat Intel’s deeper pockets.

“This is a moment, but this has to be a sustained thing,” Qualcomm’s Don McGuire said. “It’s about the next six years, not the next six months.”

True enough. But if IDC is right—and, to be clear, not a great track record here—then AI PCs will only make up 20 percent of all PC sales by 2026. So even if Qualcomm controls, say, 20 percent of that number, as it did in June, it will still be fighting from a minority position in the market compared to Intel.