IDC believes AI can turn the tide for PC makers to sell more new computers. Manufacturers are also optimistic. But is that right?

You could already read it this morning: PC sales fell again by nine percent in the third quarter of 2023. HP still had a good quarter with growth of six percent, the rest (with Apple at the top) suffered the setbacks. After the boom of the Corona years, the PC industry is in a persistent slump, although there is cautious optimism.

People are hopeful about generative AI, the technology hype of the year. Not only from the manufacturers’ camp, but also from analysts. In his analysis of the market figures, IDC analyst Linn Huang unhesitatingly calls generative AI the turning point for the industry.

AI as a life preserver?

Why is the breakthrough of generative AI so important for PC manufacturers right now? Artificial intelligence requires solid internal work. The new generation of Intel Meteor Lake chips features an entirely new architecture with different “tiles” to handle heavy workloads more efficiently. HP wants to make it possible to retrieve large-scale AI models from the cloud and run them locally on your PC.

Even the most powerful business workstation cannot currently handle this. It is therefore believed that demand for generative AI will remain so high that when new PCs built for AI come onto the market, they will be sold immediately. Manufacturers would therefore benefit from the billions in profits that Nvidia makes as the largest GPU manufacturer.

This all sounds very premature and Huang needs to take this nuance into account. There are currently too few concrete use cases to show why you should have a powerful (and expensive) AI chip in your PC. Generative AI products are not yet delivering the revenues software providers were hoping for, which could dampen enthusiasm in the long term.

Moving on to Windows 11 (and 12?)

A lifebuoy that seems to offer more guidance comes from Windows. Microsoft will begin systematically phasing out support for Windows 10 starting next year, but not until October 2025. Many companies will gradually have to check whether their PCs are compatible with Windows 11, and if not, they will have to buy new PCs acquire.

Of course, there are also the increasingly loud rumors about the launch of Windows 12. Microsoft is keeping a low profile for now, but Intel seems to know more. The Windows update would focus on artificial intelligence, which in turn could increase demand for PCs with AI chips.

Slow road to recovery

So there are reasons to be optimistic about the future of the PC industry. It wouldn’t be the first time she’s resurrected after being declared dead. IDC analyst Jitesh Ubrani says manufacturers need to grit their teeth first:

“The PC industry is on a slow recovery path as a device refresh cycle and the end of support for Windows 10 will boost sales in the second half of 2024 and beyond. In the meantime, the PC industry will unfortunately have even more problems.” Ubrani also advises manufacturers to use this time to evaluate their production processes and specifically explore “options” outside of China. HP has already followed this advice.