In the final quarter of 2023, the global personal computer market finally halted its string of consecutive shipment declines, registering a modest 3% year-on-year growth.

This positive momentum carried over into 2024, with high hopes for the PC market fueled by expectations that AI would propel PC shipments to new heights. Consequently, the industry dubbed 2024 as "the first year of AI PCs."

Canalys predicts that nearly 50 million PCs will incorporate AI capabilities and be equipped with dedicated AI accelerators (such as NPUs) in 2024. According to Semiconductor Trends and Research, total AI PC shipments in China surpassed 800,000 units from January to October 2024, with annual shipments anticipated to exceed one million units. As 2024 draws to a close, let's evaluate the rapid evolution of AI PCs.

01

Year-in-Review of AI PCs

To gain a comprehensive understanding of the AI PC market, let's first examine the PC market in 2024.

First Quarter

As anticipated, the first quarter of 2024 got off to a strong start, with global shipments of desktops and notebooks increasing by 3.2% year-on-year. Notebook shipments grew by 4.2% to reach 45.1 million units. Channels and suppliers completed the final stages of inventory adjustments during this quarter.

Several AI PC-related products were introduced in the first quarter. In March, Apple launched the AI-enabled MacBook Air. On March 18, Honor unveiled its first AI PC, the MagicBook Pro 16. Microsoft followed suit on March 22, announcing the launch of its first Surface AI PCs specifically designed for business users.

Second Quarter

Global shipments of desktops and notebooks increased by 3.4% year-on-year in the second quarter, totaling 62.8 million units. Notebook shipments also grew by 4%. During this quarter, shipments of AI-enabled PCs reached 8.8 million units, accounting for 14% of all PC shipments.

The second quarter witnessed an explosion of AI PC launches. Huawei introduced its first AI PC, the MateBook X Pro, equipped with the Intel Core Ultra 9 and leveraging Huawei's Pangu large model. Lenovo released six AI PC products, including the Yoga Book 9i and Yoga Book AI Yuanqi Edition, featuring Lenovo's Xiao Tian personal assistant with a large personal AI model.

In May, Microsoft unveiled Copilot+PC, touted as the "most powerful" version of Windows ever, powered by the Qualcomm Snapdragon X series platform with 45 tera operations per second (TOPS) of computing power. Acer, ASUS, HP, Lenovo, and other brands also introduced new PC products equipped with Copilot functionality.

Statistics reveal that shipments of PCs with AI capabilities in the Windows domain surged by 127% quarter-on-quarter in the second quarter. Lenovo's AI PC shipments accounted for 6% of the total, with a year-on-year growth rate of 228%. HP captured approximately 8% of the market share for Windows-based AI PCs in the second quarter, while Dell's share was slightly below 7%.

Third Quarter

The global PC market continued to grow year-on-year in the third quarter, albeit at a slower rate of 1.3%, with shipments reaching 66.4 million units and notebook shipments growing by 2.8%. The recovery of the PC market has been gradual.

Chip manufacturers showcased their strengths during this quarter. In July, the first batch of AI PCs equipped with AMD Ryzen AI 300 series mobile processors and Ryzen 9000 series desktop processors were launched. The third-generation Ryzen AI processors support local running of large models with up to 7 billion parameters and 2K input sequence lengths, with over 100 designs available across major OEM brands like Acer, ASUS, Dell, HP, Lenovo, and MSI.

Intel released the Core Ultra 200V series processors in September, emphasizing a 40% reduction in power consumption compared to Qualcomm's flagship X Elite chip (X1E-80-100) while delivering similar performance. Over 80 AI PCs equipped with this series of processors were unveiled, involving more than 20 PC manufacturers, including Acer, ASUS, Dell, HP, Lenovo, LG, MSI, and Samsung.

Statistics show that shipments of AI-enabled PCs reached 13.3 million units in the third quarter, accounting for 20% of all PC shipments. AI PC shipments increased by 49% quarter-on-quarter, indicating steady growth. For the first time, Windows devices accounted for the majority of AI PC shipments, reaching 53%.

It's worth noting that the Copilot+ PC powered by the Qualcomm Snapdragon X series chip experienced its first full quarter on the market, but sales were underwhelming. As of the end of the third quarter of 2024, cumulative sales of Qualcomm Snapdragon X series notebooks reached approximately 720,000 units, accounting for only 0.8% of the global PC market. This suggests that the x86 market remains challenging to penetrate.

Fourth Quarter

Canalys believes that PC shipments will experience modest growth in the fourth quarter. On the corporate side, demand is particularly strong due to the one-year deadline for upgrading devices to Windows 11. On the consumer side, while demand isn't robust, year-end promotions and events will help boost PC shipments.

02

Looking Ahead: 2025 AI PCs from the Roadmap Perspective

AMD Roadmap

AMD AI PC Roadmap

AMD's entry into the AI era has been meticulously planned. In December 2023, AMD launched the Ryzen 8040 series processors, codenamed Hawk Point, with some models integrating the Ryzen AI NPU, offering enhanced AI computing capabilities.

AMD's AI PC expansion gained momentum in 2024. Following Hawk Point, AMD transitioned to the Zen 5 generation in the second half of the year, introducing the higher-end Strix Point and Strix Halo series. In 2025, Krackan Point will succeed Hawk Point.

In 2026, the Medusa and Medusa series will succeed the Strix Point and Strix Halo series, ushering in the Zen 6 architecture CPU and RDNA architecture GPU era.

AMD's vision for AI PCs reflects a hybrid cloud-edge approach similar to Qualcomm and Apple. AI PCs handle efficient and rapid output of small models and privacy protection, while the cloud manages high-performance output of large models. For complex tasks, the edge provides direct and rapid previews, with final delivery handled by cloud models.

AMD's focus for optimizing AI PCs is on creating a seamless hybrid cloud-edge experience, effectively bridging the preview from edge models with the final product from cloud models.

Intel Roadmap

Intel Client Roadmap

Insights into Intel's AI PC strategy can be gleaned from comments by Wang Rui, Intel Senior Vice President and Chairman of Intel China. Wang Rui stated, "The rapid deployment of AI applications is increasing demands on semiconductors in terms of performance, power consumption, integration, and reliability. This trend has given rise to the need for system-level semiconductor manufacturing. To this end, Intel is actively investing, with Intel 18A set to enter mass production in 2025. The next-generation AI PC processor Panther Lake and the next-generation data center processor Clearwater Forest, both based on Intel 18A, will also be released next year."

Intel officially launched the Core Ultra processors in December 2022. According to Intel's Core Ultra product roadmap, 2023 featured Meteor Lake, followed by Lunar Lake and Arrow Lake in 2024, and Panther Lake in 2025. Future products for 2026 do not have a specific architecture codename yet.

Lunar Lake is highly anticipated by Intel and is hailed as the "flagship SoC for the next generation of AI PCs." Lunar Lake's AI performance is more than three times that of the Meteor Lake processor, with a neural processing unit capable of executing over 40 TOPS per second and a GPU capable of over 60 TOPS. Intel expects to deliver over 40 million Core Ultra processors this year.

The Arrow Lake processor was first announced in October. While significantly improved energy efficiency and AI performance are known to be its core upgrades, not much more information is available. However, leaks suggest that Intel's Arrow Lake "Core Ultra 200" CPU will come in multiple versions, including Arrow Lake-S for desktops, Arrow Lake-HX for enthusiast-level notebooks, Arrow Lake-H for high-end notebooks, Arrow Lake-U for mainstream notebooks, and Arrow Lake-WS for Xeon workstations.

Panther Lake will be the next major successor to Lunar Lake/Arrow Lake. It is expected to be twice as fast as its predecessor and five times faster than Intel's upcoming Meteor Lake chip.

Nova Lake is the latest CPU architecture mentioned. It is rumored to offer a significant 60% IPC improvement over previous generations and will feature Intel's third-generation Xe3 Celestial GPU architecture for integrated graphics.

Currently, one of Intel's core competitive advantages is its ability to achieve balanced development across the three AI Engines: CPU, NPU, and GPU. In recent announcements, Intel has particularly emphasized the low power consumption of its products, aiming to shed the label of high power consumption associated with x86.

Qualcomm Roadmap

Qualcomm's strategy for PC chips was recently revealed during their 2024 Investor Day.

Last year, Qualcomm launched the flagship Snapdragon X Elite processor, with Windows PCs equipped with this processor priced around $1,000. In April of this year, the Snapdragon X Plus was targeted at mid-range PCs priced around $800. In the future, Qualcomm plans to introduce a processor suitable for entry-level PCs, priced around $600. Qualcomm aims to have a complete chip lineup for every segment of the PC market.

By 2026, Qualcomm's product line will cater to 70% of the Windows notebook market. According to their current forecasts, over 100 notebooks based on the Snapdragon X lineup will be available by 2026.

Qualcomm also revealed that the upcoming third-generation Oryon CPU will power the Snapdragon X Elite Gen 2 chipset, expected to achieve a leap in performance and efficiency. Qualcomm expects to launch the Snapdragon X Elite Gen 2 in 2025, with Windows PCs based on this chip expected to ship in the following months.

03

Computing Power and Price Influence the 2025 Market

According to Gartner's latest forecast, global shipments of artificial intelligence personal computers (AI PCs) will reach 114 million units in 2025, an increase of 165.5% over 2024.

After the inaugural year of AI PCs, the prototype has emerged: PCs with embedded neural processing units (NPUs). Consumers have shifted from speculating which PCs might incorporate AI functionality to anticipating that most PCs will eventually integrate AI NPUs.

For example, as shown in the image above, AMD's Phoenix and Hawkpoint, such as the 8840HS, can reach up to 38 TOPS (with 16 NPUs). Intel's Meteor Lake, such as the 7155H, can reach up to 34 TOPS (with 11 NPUs). Qualcomm's Snapdragon X Elite can reach up to 45 TOPS.

Expectations for NPU computing power have become a significant factor influencing consumers' choice of AI PCs.

Additionally, price has always been a major factor affecting the promotion of AI PCs. Currently, announced prices of AI PCs range from approximately $6,000 to $16,000. The high price has, to some extent, raised the threshold for consumers considering the purchase of a new generation of AI PCs and may even deter some potential buyers. This is why Qualcomm mentioned earlier that it will introduce cheaper PC chips next year.

IDC predicts that in the next five years, the average unit price of AI laptops will range between $5,500 and $6,500 in the consumer market, primarily targeting individuals and households, while the average unit price of AI desktops will be around $4,000. Only when the price of AI PCs becomes mainstream can they become mainstream models. Therefore, PC manufacturers should strive to make AI PCs more affordable next year.