The global PC market is changing rapidly as the hype around AI PCs grows and enterprise users start shopping for laptops and desktops. The PC market grew 3 percent, marking the second quarter of growth after seven straight quarters of decline, according to preliminary data from market research firm IDC.

While that’s higher than the 1.9 percent growth rival firm Gartner says the market saw in the quarter, both numbers point to a recovery in a sector that was crushed after sales surged at the start of the pandemic. , which depressed sales in subsequent quarters. .

“Make no mistake, the PC market, like other technology markets, faces near-term challenges due to maturity and acceleration,” said IDC Group Vice President Ryan Reith.

“However, two consecutive quarters of growth, with substantial market share around AI PCs and a less sexy but arguably more important commercial refresh cycle, seems to be what the PC market needs. Non-AIPC is happening with purchases to give this mature market signs of positivity.”

In Q1 2023, Gartner reported that PC shipments fell a staggering 30% year-over-year, before starting to back up in Q2 2023 when the firm reported a 16% decline in PC shipments.

A closer look at the Windows Copilot key.  (Photo: Microsoft)A closer look at the Windows Copilot key.  (Photo: Microsoft)

A closer look at the Windows Copilot key. (Photo: Microsoft) (Microsoft)

The decline was a sharp change from the explosive growth the PC industry saw in the early days of the pandemic. Consumers and enterprise users spent months stuck on their couches buying new systems for work and entertainment from home. But with so many people buying PCs at once, few customers needed new machines in the months that followed, causing sales to take a nosedive.

Since then, sales have continued to improve, as consumers have started replacing laptops and desktops purchased in the early months of 2020.

The decline in the PC market affected everything from software vendors like Microsoft ( MSFT ), which reported sales of Windows OEMs, or sales of its Windows operating system to laptop and desktop manufacturers. , the company fell 39 percent in the second quarter of fiscal 2023.

Intel ( INTC ) and AMD ( AMD ) saw similar declines, with Intel reporting that its first-quarter revenue from its Client Computing Group, the organization responsible for PC chip sales, was flat compared to Q1 2022. Confidence fell by 38%. AMD reported that 65% of the year. Net income for its client group fell from $2.1 billion to $739 million in 2023.

The market shift comes as the PC industry sees AI PC as the next step in development for laptop and desktop manufacturers. AI PCs are roughly defined as PCs equipped with specialized neural processing units.

AMD is launching the first AI PC desktop chip at CES 2024.  (Image: AMD)AMD is launching the first AI PC desktop chip at CES 2024.  (Image: AMD)

AMD launched its first AI PC desktop chip at CES 2024. (Image: AMD) (AMD)

Microsoft is marketing AI PCs that incorporate its Copilot technology as Copilot+PCs. It’s a bit of a mouthful, and the company didn’t take off quite as well as it had hoped. Initially, Microsoft was expected to kick off its Copilot+PC push with a software feature called Recall designed to screenshot virtually everything on your PC. This makes it easy to pick up where you left off and prevents you from losing your place while searching. Web security researchers raised concerns about the app, and Microsoft was forced to withdraw the feature to fix any potential problems.

Intel, AMD, and Nvidia are also joining the AI ​​PC push, with Intel and AMD launching AI PC chips, and Nvidia noting that PCs running their own dedicated graphics chips can run AI PC apps. Can handle easily.

Qualcomm ( QCOM ) is also making a run at the AI ​​PC market, launching its latest PC chip in Microsoft Copilot+ PCs that include the company’s Surface Laptop and Surface Pro. The chipmaker promises the kind of performance that Apple has managed to squeeze out of its MacBook Pro and MacBook Air laptops, including all-day battery life and exceptional processing power.

The AIPC market is still new — Microsoft only launched its Copilot+ PCs in May — and there’s no telling yet how many users will choose an AI PC specifically for their capabilities. And how many of them will be because they are just the latest and the biggest on the market. Still, the industry is clearly on the upswing, and for PC makers, that’s what matters most.

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Email Daniel Hawley at [email protected]. Follow him on Twitter. @DanielHowley.

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