Is the AI PC "much ado about nothing" for Microsoft and Qualcomm? Shipments this year will only account for 3%

Author: Li Dan

Source: Hard AI

From Microsoft to Qualcomm, tech companies are leveraging the AI trend to launch marketing campaigns promoting laptops and desktops with AI capabilities, known as AI PCs. These computers differ from regular PCs by adding a processor specifically designed to accelerate tasks such as personal assistants and automated functions. However, data from institutions show that AI PCs are still in the early stages and will take a few years to impact computer sales.

Research firm IDC estimates that only 3% of PCs shipped this year meet Microsoft's criteria for AI PCs. By 2026, AI PCs are projected to account for only about 20% of global new PC shipments, equivalent to one-fifth of shipments two years later.

Media reports suggest that in order to convince consumers and businesses to start purchasing AI PCs now, the industry needs to offer a greater variety of PCs and software that utilize this new hardware. So far, analysts and commentators remain skeptical about the AI capabilities of these new computers. Financial analyst Eric Compton from Morningstar, who focuses on the PC industry, believes that the practicality of AI PCs is limited because few software manufacturers, apart from Microsoft, are developing features to optimize computers for AI tasks using new chips.

According to sources cited by the media, a major PC manufacturer proposed adjusting software to enable direct use of AI tools when new computers are launched, but this request was rejected by application manufacturers such as Adobe, Salesforce, and SentinelOne. These manufacturers are all providing AI capabilities through the cloud.

Gregor Stewart, VP of AI at SentinelOne, stated in a release that the company is considering optimizing its products for AI PCs in future developments, but these devices may take several years to reach a "sufficient scale of machine deployment." Clara Shih, who leads Salesforce's AI efforts, mentioned that the company is developing language models that support various generative AI on the edge, but did not provide a specific release timeline.

In June of this year, Microsoft's first batch of AI PCs, the Copilot+PC, was launched, featuring the Qualcomm Snapdragon X and starting at $999. Some media outlets compared it to the "Tesla of PCs."

Media recently mentioned that an employee of the electronic product retail giant Best Buy stated shortly after the release of PC in June that most of the AI functions on the market are just gimmicks. Wall Street News previously reported that Microsoft's flagship AI PC feature Recall was embroiled in a negative review storm because it took a screenshot of the activity window every few seconds by default, recording all user operations in Windows without content review. This means that Recall can capture all screen content, including bank account passwords, confidential documents, etc. Later, due to privacy concerns, Microsoft suspended the Recall feature.

Some netizens commented that the Recall issue is a complete disaster, and some netizens said that Microsoft's marketing department should be held responsible for this.

Microsoft's spokesperson once stated that developers have shown "great enthusiasm" in developing apps for new AI PC hardware, and the user feedback for the new device is "very good." The supplier of the new PC chip, Qualcomm, has stated that it is ready to challenge Intel's dominant position in the PC chip field. PC manufacturers such as Dell and HP hope that AIPC will once again stimulate consumer interest in PCs.

The media believes that many companies participating in the AI PC trend face huge risks, but even with limited functionality at present, AI PCs also have the potential to trigger a wave of high-priced PC purchases. Many consumers, businesses, and schools purchased laptops in the initial months of the epidemic outbreak but have not upgraded. The new AI features will help guide buyers to purchase high-end PCs. Morgan Stanley analyst Samik Chatterjee predicts in a report that the average selling price of the new generation AI PC based on Qualcomm chips will be about 48% higher than non-AI PCs. He predicts that by 2026, Qualcomm chips will account for approximately 25% of the AI PC market.

There are initial signs that consumers are starting to accept AI PCs. Data provided by market research company Circana shows that one-fifth of computers sold during the new product launch week are AI PCs. Mike Crosby, Executive Director of Circana, stated that tech-savvy consumers such as content creators are adopting new machines faster, while the general public may still be a bit "confused." Qualcomm claims that its more efficient AI chip designed based on Arm architecture means that an AI PC can last for days on a single charge. Avi Greengart, an industry analyst at Techsponential, pointed out that the main selling point of current laptops is battery life, not AI However, due to different chips, several generations of software written for Intel or AMD chips may encounter compatibility issues. Common apps such as Microsoft's Office, Meta's WhatsApp, and Adobe's Photoshop have been optimized for Arm-based systems. However, Morgan Stanley analyst Erik Woodring pointed out that many old versions of apps still used by enterprises will not receive support for the new Arm systems, which may limit the adoption of AI PCs by businesses.

Later this year, Intel and AMD are expected to release their own AI PCs, which may not have compatibility issues like Arm-based devices. However, the media believes that these PCs still have a long way to go to gain consumer and enterprise adoption