HomeWinBuzzer NewsQualcomm and Microsoft Bet on Copilot+ AI PCs Despite Slow Market Growth

Qualcomm and Microsoft Bet on Copilot+ AI PCs Despite Slow Market Growth

Microsoft and Qualcomm are powering AI PCs with advanced features, but adoption is slow and analysts predict low sales in 2024.

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and are spearheading a campaign to elevate a new category of computers known as “AI PCs.” These devices are equipped with an additional processor to boost artificial intelligence features, such as advanced personal assistants and task automation. However, a report from Bloomberg shows that AI PCs will not help the market in 2024, meaning tech companies will need to be patient. 

These AI-optimized PCs incorporate processors specifically designed to enhance AI functionalities, distinguishing them from traditional computers. However, adoption is currently modest, with projections indicating only a small fraction of PCs sold this year will be AI-capable. Companies like Adobe and Salesforce have yet to fully commit to leveraging these AI features in their software.

Industry Implications

The drive to integrate AI more comprehensively into consumer technology signifies a broader industry trend. New processors aim to enhance efficiency and user experience, potentially redefining how users engage with their devices. However, the widespread success of AI PCs will rely on their ability to attract users as well as software developers.

According to IDC, the global is expected to see a growth of just 2.6 percent in 2024, excluding . Analysts predict that AI PCs will account for less than 3 percent of PC sales this year. If this forecast holds, fewer than 8 million AI PCs will be shipped in 2024, compared to the total PC market of 260.2 million units. The PC industry shipped just over 250 million units in 2023, with IDC estimating 259.5 million for the year, indicating a relatively stable market with a projected decline of 1.1 percent in consumer PC sales.

Qualcomm's Market Share and Strategy

Qualcomm's market share saw a substantial rise, reaching 20 percent in June, following the release of the first Snapdragon X-based Copilot+ PCs. IDC also pointed out that while AI PCs may not significantly boost shipment volumes in 2024, they are expected to raise average selling prices, benefiting manufacturers' margins.

Battery life and efficiency remain the main attractions of these new PCs, despite the push for . Major app developers, including Adobe, continue to prioritize cloud-hosted AI capabilities over on-device AI features. Microsoft asserts that there is developer interest in on-device AI, although most supportive apps come from smaller, lesser-known companies.

Future Prospects

, a long-standing leader in the PC , is anticipated to enter the AI-enhanced PC segment soon. Intel's established market presence provides a competitive edge. Qualcomm has been increasing its marketing incentives to PC manufacturers to compete with Intel's substantial financial clout.

Don McGuire from Qualcomm highlighted the importance of long-term commitment, stating, “This is a moment, but this has to be a sustained thing. It's about the next six years, not the next six months.” IDC projects that AI PCs will constitute 20 percent of the PC market by 2026. Even if Qualcomm retains a 20 percent market share of this segment, it will remain a smaller player compared to Intel.

SourceBloomberg
Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.
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