Canalys indicated that during the specified timeframe, 8.8 million PCs equipped with AI capabilities were shipped, with 40% operating on Microsoft Windows and 60% on macOS.
Canalys characterizes an AI-capable PC as either a desktop or laptop that features a chipset or module specifically designed for handling AI tasks, such as a neural processing unit (NPU). The report highlighted that with the AI-capable PC strategies of all leading processor manufacturers now in full swing, a notable increase in device availability and user adoption is anticipated in the latter half of 2024 and beyond. “During the second quarter of 2024, we witnessed a significant boost in the growth of AI-capable PCs,” stated Ishan Dutt, Principal Analyst at Canalys. “June marked the introduction of Copilot+ PCs that utilize Qualcomm’s Snapdragon X series chips, which are based on Arm architecture,” he elaborated. “Although shipment numbers for the quarter were modest due to limited availability in terms of time and geography, the strong commitment from Windows OEMs to integrate these products into their offerings is promising for the future of this category.” “With a solid groundwork now established, shipments of AI-capable PCs are expected to gain further momentum in the latter half of 2024,” he concluded.
The expansion of the AI-PC market is primarily fueled by supply factors.
Dutt indicated that processor manufacturers and original equipment manufacturers (OEMs) are poised to reach a broader customer base by introducing new product categories at various price points. Meanwhile, channel partners are expressing a preference for PCs equipped with AI features. He highlighted that nearly 60% of participants in a May survey anticipate that consumers will prefer devices featuring a Copilot key. “The market performance of AI-enabled PCs has generally met expectations, and projections from Canalys suggest that the industry is on course to ship approximately 44 million units in 2024 and 103 million units in 2025,” he remarked. Mikako Kitagawa, director and analyst at Gartner, a research and advisory firm located in Stamford, Connecticut, emphasized that OEMs are demonstrating a strong dedication to AI-capable PCs. However, she noted to TechNewsWorld, “The trend towards AI PCs is driven by supply rather than demand.”
Dev Nag, CEO and founder of QueryPal, an enterprise chatbot based in San Francisco, stated, “The recent emergence of AI-capable PCs illustrates the hardware sector’s efforts to address the chicken-and-egg dilemma by creating a substantial installed base for application developers to focus on.” He further explained to TechNewsWorld, “While there aren’t many mainstream applications currently requiring NPUs, unlike GPUs, there are several intriguing opportunities that these manufacturers are eager to initiate.”
Nag listed a number of potential features, such as enhanced local real-time video calls, sophisticated photo editing, real-time language translation, and productivity-boosting features including sophisticated local file searches and intelligence document summarizing.
Application Shortage Slowing Adoption…..
OEMs are expressing a measured sense of optimism, according to Nag. He noted that they recognize the potential for a significant upgrade cycle and are keen on maintaining a strategic partnership with Microsoft.
He further mentioned that their primary focus is on integrating NPUs into high-end and business-oriented markets before expanding to the wider consumer sector.
This trend is reflected in the Canalys report, which indicated that the penetration of AI-capable PCs in the Windows PC market priced above $800 increased from 7% in Q1 to 14% in Q2.
Nag anticipates a gradual rise in AI PC market share, projecting it to reach the mid to high 20% range next year, although he cautioned that a lack of applications may hinder this growth.
He added that if the application market begins to leverage this hardware effectively, we could witness the emergence of ‘killer apps’ that would accelerate adoption by 2025.
Much of this initial uptake is expected to originate from the enterprise sector. Kitagawa pointed out that large enterprises are likely to be the quickest to embrace AI PCs, as many AI functions are shifting from cloud environments to local systems, which aligns with their preferences and enhances the utility of AI PCs.
Dazed and Confused Consumers…..
Although vendors have shown considerable enthusiasm for AI-capable PCs, consumer interest has been comparatively lukewarm. Andrew Hewitt, a principal analyst at Forrester, a market research firm based in Cambridge, Massachusetts, noted, “Consumer response to the AI PC has been underwhelming thus far.” He referenced a recent Forrester study from the second quarter of this year, revealing that over 50% of U.S. consumers are unfamiliar with the concept of an AI PC.
There remains significant uncertainty regarding the distinctions between AI PCs and traditional PCs, as noted by him in an interview with TechNewsWorld. He believes this confusion stems from the general consumer’s lack of understanding about the differences among a CPU, GPU, and the recently introduced neural processing unit (NPU), which is a key feature of AI PCs, though not the only one. He further pointed out that many users tend to link generative AI applications like ChatGPT and Copilot with AI PCs, rather than recognizing the underlying hardware changes. Nag also mentioned that most individuals purchasing Apple laptops are likely unaware that these devices are equipped with AI capabilities through Apple’s Neural Engine, and they may not even consider app compatibility as a factor in their purchasing decisions.
The launch of the Copilot Key for AI-enabled PCs by Microsoft earlier this year is not currently generating significant demand in the market; rather, it represents an effort to steer the industry towards a specific vision, according to him. He noted that while some early users have expressed concerns regarding possible restrictions related to AI-specific NPUs, given that many GPUs can deliver similar or superior AI computing capabilities, the broader response has been characterized more by indifference than confusion. “Applications will foster greater user awareness than the hardware itself,” Nag stated.
Greater Emphasis on Marketing Than on Practical Use…..
Hewitt acknowledged that the enterprise sector will be the primary driver of AI PC adoption. However, he believes that significant mass adoption is unlikely until 2025, when numerous companies will be either initiating or finalizing their migration from Windows 10 to Windows 11 in order to comply with the end-of-life timeline for Windows 10. He further noted, “Our report indicates that many of the relevant use cases will involve personas such as creatives, developers, and data scientists, who stand to gain the most from applications leveraging the NPU.” HP Newquist, the executive director of The Relayer Group, a science and technology exhibition firm based in New York City and the author of “The Brain Makers: Genius, Ego & Greed In The Quest For Machines That Think,” contends that, at this point, the AI PC is primarily a marketing strategy rather than a substantial innovation.
