After several consecutive quarters of decline, the global personal computer market is finally showing faint signs of recovery.

According to Canalys data, total shipments of desktops, laptops, and workstations increased by 1.3% to 66.4 million units in the third quarter of 2024, marking the fourth straight quarter of year-over-year growth. Specifically, laptop shipments reached 53.5 million units, up 2.8%, while desktop shipments declined by 4.6% to 12.9 million units.

Despite the pressures on PC market growth, it continues to be fueled by new momentum, primarily driven by the incremental demand generated by the rapid penetration of AI into the PC market.

Canalys data reveals that global AI PC shipments amounted to 13.3 million units in the third quarter of 2024, accounting for 20% of total PC shipments. It is anticipated that global AI PC shipments will reach 48 million units in 2024, representing 18% of total PC shipments, and are expected to surpass 100 million units in 2025, accounting for 40% of total PC shipments.

Undoubtedly, the fusion of AI and PCs is unstoppable, with AIPC poised to become the linchpin in the new round of competition among PC brands.

AIPC Fuels Volume and Price Growth in the PC Industry

Empowered by AI technology, the traditional PC industry is undergoing a profound transformation and revitalization.

In terms of performance, the integration of AI technology has facilitated a qualitative leap in PC capabilities in areas such as data processing, image recognition, and natural language processing. As for applications, the incorporation of AI technology enables PCs to handle more complex scenarios, vastly expanding their application range.

For instance, AIPC can assist household users in managing various smart devices intelligently, aid doctors in medical diagnosis, provide students with intelligent and personalized learning experiences, and support financial professionals in data analysis, risk assessment, and intelligent customer service applications.

The marriage of PC and AI technology significantly enhances the performance and versatility of PC products, driving both volume and price growth in the PC industry.

On one hand, the robust demand for AI functionalities from consumers spurs manufacturers to increase R&D investments and launch more high-quality AIPC products, further bolstering the growth of the PC market. According to Semianalysis research, total AI PC shipments in China from January to October 2024 exceeded 800,000 units, with annual predictions surpassing 1 million units.

On the other hand, the high performance, high added value, and high cost of AI PCs prompt manufacturers to raise product pricing, leading to a substantial increase in the average selling price of PCs. Currently, AI PCs are generally priced higher than traditional PCs, such as Lenovo's Yoga Book 9i at 17,999 yuan, ThinkPad T14p at 14,999 yuan, and Yoga Pro 16s at 13,999 yuan.

It's undeniable that the rise of AI PCs is profoundly altering the development trajectory of the PC industry. As traditional computer brands like HP, Dell, and Lenovo integrate cutting-edge AI technologies into personal computer platforms, the competition in the AIPC space is intensifying.

Lenovo PCs in Deep Trouble, Placing a Bet on AI PCs

The traditional PC market continues to shrink, with Lenovo, the leader in the PC market, feeling the pinch the most. Although it still maintains a dominant position in the global PC market, its shipments have declined in recent years, intensifying the pressure on Lenovo in terms of market share and profits.

Financial report data indicates that Lenovo's shipments in 2023 totaled 59.106 million units, a year-over-year decrease of 12.7%. For the nine months ended December 31, 2023, the company's revenue amounted to $43 billion, down 13% year-over-year, with net income attributable to shareholders at $763 million, a 49% year-over-year decrease.

To reverse this trend, Lenovo is committed to finding new growth avenues through continuous technological innovation and business transformation. Its strategy focuses on product intelligence and business diversification, with AI PCs serving as a pivotal initiative to drive these strategies forward.

On one hand, amidst a challenging external environment, Lenovo has not hesitated to explore new business avenues but has accelerated its layout in infrastructure services (ISG), solution services (SSG), and intelligent hardware (IDG), expanding its business footprint and steadily increasing the proportion of non-PC businesses.

On the other hand, Lenovo is honing in on its core business, optimizing its infrastructure, and creating AI product lines leveraging AI technology to prepare for future market changes and secure survival resources.

In the realm of AI products, Lenovo has established a comprehensive range of intelligent terminal product lines, including AI PCs, AI smartphones, AI tablets, etc., all infused with advanced AI technology. Particularly in the domain of AI PCs, Lenovo showcases a leading level of intelligence. Regarding AI infrastructure, Lenovo has also made a complete layout, such as the Lenovo Wanquan heterogeneous intelligent computing platform and the five major product systems encompassing servers, storage, data networks, software and hyper-convergence, and edge infrastructure.

In summary, faced with a traditional PC industry experiencing supply-demand saturation, Lenovo, which has been at the forefront in terms of shipments and market share for many years, encounters numerous challenges in pursuing further growth. Betting on AIPC is not merely a response to trends but an inevitable choice.

Six AI PCs Launched Simultaneously: What Underpins Lenovo's Confidence?

In 2024, Lenovo's PC business exhibited signs of recovery, firmly holding the top spot among the top five vendors, with AIPC significantly contributing to Lenovo's continued position as the largest PC supplier. In the second quarter of 2024, global shipments of AI-enabled PCs reached 8.8 million units, with Lenovo's AI PC shipments surging by an astonishing 228% quarter-over-quarter.

Amidst computer brands like HP, Dell, and Huawei vying for a share of the AIPC market, Lenovo's AIPC achieved a phased victory due to its forward-looking market layout and solid market foundation.

In terms of channels, Lenovo can fully leverage its existing resources. As a leading player in the global PC market, Lenovo boasts extensive brand recognition and a vast user base, coupled with a comprehensive sales channel and service system, providing a robust market foundation for the promotion and sales of AI PCs.

Of course, computer brands such as HP, Dell, and Huawei also possess strong resources in channel development and brand influence, which do not constitute Lenovo AIPC's primary or greatest advantage over other brands.

In terms of ecosystem, Lenovo has introduced a "one body, multiple ends" strategy, developing the Tianxi personal large model through independent research and launching the "Lenovo Xiaotian" personal intelligent agent, which can be embedded into various smart devices to achieve seamless cross-device connectivity and collaboration.

As of now, Lenovo's "one body, multiple ends" strategy has introduced over 1,000 AI applications into its ecosystem, with hundreds on the mini-program platform and over 900 in the AI app store. This extensive AI application ecosystem showcases Lenovo's prowess in AI technology integration and application.

At the product level, Lenovo has successfully launched 30 AI PC products equipped with cutting-edge technologies like the Snapdragon X processor and Intel Core Ultra processor, demonstrating Lenovo's keen insight and swift response to technological frontiers.

Notably, Lenovo has unveiled six AIPC products simultaneously, constructing a comprehensive and diversified product matrix. Spanning from the high-end YOGA series to the entry-level Xiaoxin series, these products precisely cover different price ranges and diverse user needs, offering consumers abundant choices.

Lenovo's forward-looking layout has garnered it applause and market share in the AIPC market, but amidst increasingly fierce market competition, it still necessitates continuous innovation and optimization to seize this lifeline.

Win and Rebound, Lose and Sink

As AIGC gains momentum, domestic and foreign technology giants continue to ramp up their investments in AIPC, whether in technological or product application competitions. The intensity and ferocity of competition in the AI PC market are palpable.

Firstly, the core competitiveness of AIPC lies in its robust processing capabilities, with major manufacturers unveiling products equipped with high-performance processors.

For instance, Intel has launched the Core Ultra processor based on the Meteorlake architecture to cater to the growing demand for AI computing power. AMD has also introduced a new generation of Ryzen series processors with AI acceleration capabilities to enhance the computational efficiency and intelligent processing abilities of AIPC.

Secondly, AI PCs are gradually emerging as a breakthrough point for all PC manufacturers. Traditional PC manufacturers like HP, Dell, and ASUS, along with smartphone manufacturers such as Huawei and Xiaomi, have launched numerous AI PC products targeting different user groups to compete in the PC market, with more products and technologies anticipated in 2025.

Therefore, Lenovo must strive relentlessly to continuously innovate, enhance product competitiveness, and excel in multiple facets such as marketing, user experience, and after-sales service, while maintaining a leading position in technology research and development.

For Lenovo, the outcome of this competition is pivotal. Success would present an opportunity for Lenovo to rebound and further solidify its market position; however, failure might result in Lenovo sinking back into the market quagmire and losing its original competitive edge.