PC shipments stuck in neutral despite AI buzz

Analysts can't agree whether market is marginally up or down

The PC market is not showing many signs of a rebound, despite the hype around AI PCs, with market watchers split over whether unit shipments are up or down slightly.

Those magical AI PC boxes were supposed to fire up buyer enthusiasm and spur the somewhat listless market for desktop and laptop systems into significant growth territory, but that doesn't appear to be happening.

According to the latest figures from Gartner, global PC shipments totaled 62.9 million units during Q3 of this year, representing a 1.3 percent decline compared with the same period last year. However, this does follow three consecutive quarters of modest growth.

"Even with a full line-up of Windows-based AI PCs for both Arm and x86 in the third quarter of 2024, AI PCs did not boost the demand for PCs since buyers have yet to see their clear benefits or business value," commented Gartner Director Analyst Mikako Kitagawa.

This is perhaps understandable when AI PCs are largely just a marketing concept, and vendors can't agree on exactly what the the definition of an AI PC should be. Even worse, some buyers of Arm-based Copilot+ machines discovered that their performance isn't actually very good with some applications.

Nevertheless, Gartner believes that the PC market is now on a recovery track, with Kitagawa claiming: "At the worldwide level, PC demand will see more uptake toward the end of 2024 and more robust growth in 2025, when the PC refresh will be at its peak."

This belief is shared by another analyst outfit, Canalys, which puts market shipments at 66.4 million units during the quarter, saying this represents a modest 1.3 percent year-on-year rise.

"Although growth in Q3 was modest, the PC market recovery is now well under way with a number of positive signals indicating stronger performance in the coming quarters," opined Principal Analyst Ishan Dutt.

Canalys says that this slight uptick is thanks to strong demand from businesses, which now have just a year to upgrade their fleets to Windows 11 to avoid paying extended support fees for Windows 10.

"Commercial procurement is expected to remain elevated throughout the rest of this year, with 54 percent of channel partners surveyed by Canalys anticipating growth in their PC business in H2 2024 compared with the same period last year," Dutt said.

The launch of the latest-generation AI PC processors from Intel, AMD, and Qualcomm is also strengthening the value proposition of upgrading an old PC, Canalys maintains, although it concedes that "consumer demand has not been as strong." It expects that the 2024 holiday season will see modest growth toward the end of this year.

The two analyst firms agree on who the top players are in the PC market, both ranking Lenovo as the number one vendor in terms of shipments followed by HP then Dell. Asus and Apple are vying for fourth and fifth spot, with Gartner putting Apple ahead, while Canalys ranks Asus higher.

Both indicate that Lenovo has seen its market share rising, with 2.5-3 percent growth year-on-year, while HP has remained largely static and Dell has declined by about 4 percent.

According to Gartner, the US market is where the growth was in the past quarter, up 5.6 percent compared with the same period last year. In contrast, the EMEA market saw a decline of about 1.5 percent, while the Asia-Pacific market saw a decline of 8.5 percent year-on-year.

The company said this was largely due to China, which saw a fall of 10 percent due to weak demand for desktop PCs from government and state-owned organizations. ®