The emergence of artificial intelligence (AI) has sparked a technological revolution, leading to speculation about whether it will trigger a surge in desktop and laptop sales, creating a "supercycle" in the next year or two.
A supercycle is a period characterized by a significant increase in PC sales and upgrades, driven by compelling technological advancements that encourage consumers and businesses to update their hardware at a faster rate. This could provide a much-needed boost to the PC industry, which has experienced a slowdown in sales since the onset of the Covid-19 pandemic.
The impact of AI on consumer and corporate markets is multifaceted and necessitates a thorough analysis, given its transformative nature. Leading PC CEOs have been showcasing new notebook PCs equipped with AI-embedded mobile processors for several months. Companies like Intel, AMD, and Qualcomm are integrating this new technology into their products both this year and in the future.
Numerous experts in the industry are forecasting that AI PCs will initiate a significant upgrade trend in the latter part of the year as more AI PCs become available in the market. However, is this prediction probable?
Intel and its collaborators recently unveiled AI PCs that are equipped with on-device generative AI capabilities designed to enhance photos, videos, and presentations. These devices also boast real-time language and speech translation, effectively breaking down communication barriers.
Nevertheless, looking at the situation objectively, the anticipated supercycle upgrade trend may not be as pronounced as many anticipate, despite the current excitement.
Dynamics of Consumer Markets
AI, such as OpenAI’s ChatGPT and Google’s Gemini, has gained immense popularity among desktop and laptop users. While these applications do not necessarily require a dedicated AI processor, it is anticipated that customers will upgrade to newer computer models to take advantage of AI-powered features like voice assistants, predictive text, and image recognition, which enhance the overall usability of PCs.
Supporters argue that as AI algorithms continue to advance, they will uncover numerous applications that demand greater computational power, ultimately driving people to invest in more powerful PCs and laptops. This line of thinking makes sense, especially with the potential increase in demand for high-performance computer hardware due to AI-driven gaming and immersive VR applications.
However, skeptics believe that while AI may enhance user experiences, it may not necessarily be a significant driver of sales. The widespread availability of basic AI functions across various devices could potentially reduce the incentive for users to upgrade. Additionally, economic uncertainty stemming from inflation and high interest rates may limit discretionary investments in IT upgrades.
Corporate clients are taking their time to embrace the Arm versions of Windows.
Historically, enterprise clients have been hesitant to adopt the Arm version of Windows due to compatibility issues. Numerous enterprise processes rely on x86-optimized software and apps, making it challenging to adapt these essential tools to Arm platforms. This adaptation process necessitates extensive testing, rebuilding, or even replacement, which can be resource-intensive and potentially disrupt workflow.
Over the past few years, the seamless integration of Arm devices with enterprise infrastructure, including peripheral devices and management systems, has not been as smooth as many customers had hoped. This lack of compatibility, particularly at the app level, has discouraged organizations from investing in Arm-based Windows solutions. Additionally, concerns about performance parity and optimization on Arm architecture have also contributed to enterprise hesitance. While Arm processor technology has advanced, there are still reservations about their ability to match x86 processors in resource-intensive activities.
Businesses that rely on fast and reliable computer performance have been hesitant to switch to Arm-based Windows machines. However, Microsoft has recently started assuring equivalent or greater performance levels and improved compatibility with existing software ecosystems, aiming to reduce enterprise client hesitance to adopt Arm versions of Windows. The latest Arm Windows 11 builds are reported to have significantly improved program compatibility, performance, and battery life.
Qualcomm's Snapdragon X Elite is truly exceptional.
Qualcomm is pinning its hopes on its upgraded mobile computing products, which provide top-notch performance and efficiency. This could potentially give the chip manufacturer a boost in the current PC upgrade supercycle. Recent benchmark results suggest that Qualcomm's new Snapdragon X Elite offering, unveiled a few months ago, establishes the company as the frontrunner in AI-enabled silicon technology, surpassing Intel, AMD, and even Apple. It's important to highlight that Apple launched its latest M3 chipsets shortly after Qualcomm introduced its Snapdragon X Elite.
The Snapdragon X Elite chips are known for their powerful and energy-efficient performance. On the other hand, Apple's A-series chips, found in iPhones and iPads, are praised for their seamless integration with Apple's hardware and software, resulting in an exceptional user experience. Apple's holistic approach to CPU optimization and ecosystem management sets industry standards and allows for swift adoption of new technologies.
In comparison, Qualcomm seems to be following Apple's integration approach, particularly at the silicon and operating system levels. Qualcomm claims that its internal benchmarking outperforms Apple's latest M3 chip solutions, despite the revelation that the Snapdragon X Elite surpasses the M3 chips in both performance and battery life.
However, the differences between macOS and Windows 11 operating systems present challenges in this analysis.
Lately, Qualcomm has allowed journalists, bloggers, and reviewers to use reference design laptops for benchmarks without any hindrance. The company showcased a new range of applications designed to make the most of the unique capabilities of the Snapdragon X Elite, particularly its top-notch NPU (neural processing unit). Most notably, Qualcomm also demonstrated several PC games that ran smoothly through emulation.
However, skeptics argue that the impact of AI on desktop and laptop sales relies on a variety of factors, including budget limitations, reliance on existing infrastructure, and the adoption of AI across different industries.
The Future of AI's Impact on PC Sales
Although no one wants to be pessimistic, the reality is that the impact of AI on desktop and laptop sales in the coming years is uncertain and depends on a variety of factors. The key factor is AI's ability to create compelling user experiences, which may be perceived differently by business customers compared to traditional consumers.
While AI-powered features could potentially drive consumer PC sales, market saturation and economic uncertainty could limit this growth, particularly due to the negative effects of inflation on discretionary spending. With the high average price of gasoline in the U.S., consumers may find it difficult to justify upgrading their current PCs.
On the other hand, the demand for AI-optimized PCs may increase due to corporate and enterprise digital transformation as well as remote work enablement. While Qualcomm, AMD, and Intel offer competitive semiconductor ingredients to major PC OEMs, the question remains whether AI-optimized applications can persuade users to upgrade. Personally, I am a bit skeptical.
Certainly, the new AI offerings bring benefits such as reduced latency, longer battery life without sacrificing performance, and local AI-generated data management for enhanced security.
However, the fragmented message from Windows could pose a challenge. Each PC OEM will promote the benefits of AI in a disjointed manner, potentially causing confusion and undermining the "you should upgrade now" argument.
The Future of Artificial Intelligence in Personal Computers
Ironically, Apple's Worldwide Developer Conference in June might actually contribute to the consumer supercycle phenomenon, as the company excels at clearly, singularly, and passionately describing compelling new usage models enabled by AI like no other.
If Apple does indeed fully embrace AI in the new iterations of iOS, macOS, and iPadOS, as rumors indicate, there's no better company to communicate the benefits of AI in a way that the majority of consumers will understand.
On the other hand, the anticipated supercycle is more likely to occur at the business and corporate levels. CIOs are constantly seeking methods to improve productivity and efficiency and are not expected to wait for Apple to lead the way. Additionally, most companies prefer AI applications to be local (or at at the edge) for security reasons, and AI-enhanced collaborative tools are appealing.
Considering all of this, the AI-driven desktop and laptop sales supercycle may not be as significant as most PC OEMs anticipate. However, the positive news for the PC industry is that Microsoft's substantially more robust Arm version of Windows 11, as well as compelling silicon solutions from Qualcomm and others, are eliminating many barriers to customers upgrading to AI-enabled PCs.
The timeline for widespread adoption may be longer than some would prefer, but AI will undoubtedly be revolutionary over the next several years.