AI-Capable PCs Capture 14% of Global Q2 Shipments

Despite their introduction midway through the second quarter, AI-capable PCs managed to account for 14% of global shipments, as disclosed in a Canalys report released on Tuesday.
The research firm indicated that 8.8 million AI-capable PCs were shipped, with 40% operating on Microsoft Windows and the remaining 60% on macOS.
Canalys categorizes an AI-capable PC as any desktop or laptop equipped with hardware specifically designed for AI tasks, like a neural processing unit (NPU).
Given that major chip manufacturers are actively developing AI-capable PC lines, the report suggests there will be a substantial increase in both the availability and consumer uptake of these devices in the latter half of 2024 and moving forward.
"The second quarter of 2024 significantly propelled the growth of AI-capable PCs," stated Canalys Principal Analyst Ishan Dutt.
He highlighted that June marked the debut of Copilot+ PCs powered by Qualcomm's Snapdragon X series chips, which are built on Arm architecture. "Although the shipment numbers were modest due to the brief availability period and limited regional distribution, the commitment from Windows OEMs to integrate these into their offerings is promising for the future of this category," Dutt explained.

The second quarter of 2024 significantly propelled the growth of AI-capable PCs

AI-PC Market Growth Driven by Supply

Dutt mentioned that chip makers and original equipment manufacturers (OEMs) are planning to broaden their customer reach by introducing AI-capable PCs at various price levels, with channel partners showing a clear interest in AI features. He pointed out that nearly 60% of those surveyed in May expressed a belief that consumers would opt for PCs with a Copilot key.
"The performance of AI-capable PCs in the market has been in line with projections, with the industry expected to ship approximately 44 million units in 2024 and 103 million in 2025, as per Canalys forecasts," Dutt added.
Mikako Kitagawa from Gartner emphasized the strong dedication of OEMs to AI-capable PCs, though she noted to TechNewsWorld that "The AI PC trend is driven by supply rather than demand."
Dev Nag, CEO of QueryPal, commented that the surge in AI-capable PCs reflects the hardware sector's attempt to address the supply-demand conundrum by creating a substantial user base for software developers to target.
"While there aren't many mainstream applications requiring NPUs yet, unlike GPUs, there's a suite of exciting potential uses that these manufacturers are aiming to initiate," Nag explained to TechNewsWorld.
He listed potential applications such as real-time video enhancement for calls, sophisticated photo editing, on-the-fly language translation, and productivity tools like intelligent document summarization and enhanced local file search capabilities.

Application Shortage Slowing Adoption

"OEMs are cautiously optimistic," remarked Nag. "They're eyeing the potential for widespread upgrades and are keen to align themselves strategically with Microsoft."
This strategy was reflected in the Canalys report, which showed that AI-capable PCs had doubled their market share in the over $800 Windows PC segment from the first to the second quarter, from 7% to 14%.
Nag forecasted, "We might see AI PC market share creep up to the mid to high 20% range next year, though the absence of compelling applications could hinder broader adoption."
"If developers begin to leverage this hardware," he went on, "we might witness the emergence of 'killer apps' that could accelerate uptake in 2025."
Much of the initial adoption is expected from the enterprise sector. "Big corporations will likely lead in adopting AI PCs," Kitagawa noted. "As AI functions shift from cloud to on-premise solutions, large enterprises, which prefer local processing, will find AI PCs increasingly beneficial."

Dazed and Confused Consumers

While AI-capable PCs have garnered significant interest from manufacturers, consumer excitement has been more subdued. "Consumer response to AI PCs has been lukewarm," noted Andrew Hewitt, a principal analyst at Forrester Research.
He referenced a Forrester survey from the second quarter of this year, which revealed that over half of U.S. consumers are unaware of what constitutes an AI PC.
"There's still a lot of confusion about how AI PCs differ from regular PCs," Hewitt explained to TechNewsWorld. "This confusion largely stems from consumers not understanding the distinctions between a CPU, GPU, and the newly introduced neural processing unit (NPU), which is a key feature of AI PCs, though not the only one."

He pointed out that the general public tends to equate AI PCs with generative AI tools like ChatGPT and Copilot, rather than recognizing the underlying hardware changes.

Dev Nag highlighted that many Apple laptop buyers are likely oblivious to the fact that their devices come equipped with AI capabilities via Apple's Neural Engine, without considering app compatibility in their purchasing decisions.

"Microsoft's launch of the Copilot Key for AI PCs this year isn't something consumers are currently demanding, but it's Microsoft's attempt to steer the market towards its vision," Nag observed.
He also mentioned that while some early adopters are concerned about the exclusivity of AI-specific NPUs when GPUs can perform similar AI tasks, the broader consumer base shows more indifference than confusion. "Ultimately, it's the applications that will raise general user awareness more than the hardware itself," Nag concluded.

It's the applications that will raise general user awareness more than the hardware itself

More Marketing Hype Than Functionality

Hewitt concurred that enterprise sectors would spearhead the adoption of AI PCs, but highlighted that widespread consumer adoption might not peak until 2025, aligning with the migration from Windows 10 to Windows 11 due to the former's end-of-life deadline. He noted that the primary users poised to benefit from AI PCs would be creatives, developers, and data scientists, who could leverage applications optimized for the neural processing units (NPUs).
HP Newquist, from The Relayer Group, described the current state of AI PCs as primarily a marketing strategy rather than a significant technological leap. He explained that manufacturers are equipping standard PCs with AI applications, often based on large language models like ChatGPT, and enhancing them with extra processing power akin to what's found in gaming PCs.
Regarding Microsoft's AI PC initiative, Newquist pointed out that while it integrates Copilot into Windows, making it a part of the OS rather than exclusive to AI PCs, the true potential of the high-powered NPUs isn't fully realized yet.
He likened the situation to building an expansive highway for vehicles that aren't designed to utilize its full capacity, suggesting that until more applications can run locally without heavy reliance on cloud resources, these AI processors will not be fully utilized.