The recovery of the global PC market continues to accelerate as buzz around AI-powered PCs grows and business customers begin to increase their purchases of laptops and desktops. Market research firm IDCthe PC market grew 3%, marking its second consecutive quarter of growth after seven consecutive quarters of sharp declines.
That beats rival Gartner’s market growth of 1.9% for the quarter, but both figures signal a recovery for a battered industry after sales were front-loaded at the start of the pandemic and then subdued in subsequent quarters.
“Make no mistake, the PC market, like other technology markets, faces near-term challenges due to maturity and headwinds,” said the IDC group vice president. Ryan Reese.
“But two consecutive quarters of growth, combined with market excitement around AI PCs and a less glamorous but arguably more significant commercial refresh cycle, seems like just what the PC market needed. While the buzz is clearly around AI, there’s also a lot happening around non-AI PC purchasing, which are positive signs for this mature market.”
Gartner reported that PC shipments will decline as much as 30% year-over-year in the first quarter of 2023, but in the second quarter of 2023, PC shipments will decline by 16% before starting to increase again.
The decline was a sharp reversal from the explosive growth the PC industry experienced early in the pandemic, when consumers and business customers, stuck on their couches for months, bought new systems for working from home and entertainment. But with so many people buying PCs at once, fewer customers needed new machines in the months that followed, and sales plummeted.
Since then, sales have continued to improve as consumers have begun replacing the laptops and desktops they purchased at the beginning of 2020.
The decline of the PC market has hit all software vendors like Microsoft hard.MSFT) reported that Windows OEM sales, or sales of the Windows operating system to laptop and desktop makers, fell 39% in the second quarter of fiscal 2023.
Intel (International Trade Commission) and AMD (Am), with Intel reporting a staggering 38% decline in first-quarter revenue for its Client Computing Group, the organization responsible for PC chip sales, compared to the first quarter of 2022. AMD reported a 65% decline in its Client Group net revenue for 2023 year-over-year, from $2.1 billion to $739 million.
The market upturn comes as the PC industry looks to AI PCs, loosely defined as PCs equipped with specialized neural processing units, as the next growth driver for laptop and desktop manufacturers.
Microsoft markets its AI PC with Copilot technology as Copilot+PC, a name that’s a bit long, and the company’s launch hasn’t gone as well as expected. Initially, Microsoft was planning to kick off Copilot+PC with a software feature called Recall that would take screenshots of almost everything you do on your computer, making it easier to pick up where you left off and ensure you don’t lose your place while searching the web. But security researchers raised concerns about the app, forcing Microsoft to pull back the feature to address potential issues.
Intel, AMD and Nvidia have also gotten into the AI PC push, with Intel and AMD launching AI PC chips and Nvidia pointing out that PCs with dedicated graphics chips can easily handle AI PC apps.
Qualcomm (QCOMMicrosoft is also entering the AI PC market, equipping its Microsoft Copilot+PCs, including its Surface Laptop and Surface Pro, with its latest PC chips. The chipmaker promises the kind of performance Apple squeezes out of its MacBook Pro and MacBook Air laptops, including all-day battery life and exceptional processing power.
The AI PC market is still new — Microsoft only launched Copilot+PC in May — so it’s too early to tell how many users will choose an AI PC specifically for its features, and how many will simply choose it because it’s the latest and greatest on the market. Still, the industry is clearly on the rise, and for PC makers, that’s all that matters most.
Contact Daniel Howley at [email protected]. Follow him on Twitter. Daniel Howley.
Click here for the latest technology news impacting the stock market.
Read the latest financial and business news from Yahoo Finance
