The dawn of artificial intelligence (AI) has sparked a technological revolution, prompting speculation about whether it will initiate a significant surge in desktop and laptop sales—a phenomenon commonly referred to as a “supercycle”—within the next year or two.
During a supercycle, PC sales and upgrades experience a notable uptick, driven by compelling advancements in technology that motivate both consumers and businesses to refresh their hardware at an accelerated pace.
Given the plateauing of overall sales since the onset of the Covid-19 pandemic, the PC industry could certainly benefit from such a boost.
As with any transformative technology, AI’s impact on consumer and corporate markets is multifaceted and warrants thorough analysis.
CEOs of leading PC manufacturers have been showcasing new notebook PCs equipped with AI-integrated mobile processors for several months now. Companies like Intel, AMD, and Qualcomm are integrating this new technology into their products, both this year and beyond.
Many industry experts anticipate that AI-powered PCs will catalyze a supercycle of upgrades in the latter half of the year as more AI-enabled devices enter the market. But is this forecast realistic?
Recently, Intel and its partners unveiled AI-enhanced PCs featuring on-device generative AI capabilities for enhancing images, videos, and presentations. These devices also boast real-time language translation and speech recognition, effectively overcoming communication barriers.
However, setting aside the hype, it’s plausible that the anticipated supercycle upgrade phenomenon may not be as pronounced as some expect.
Consumer Market Dynamics
AI, particularly cloud-based applications like OpenAI’s ChatGPT and Google’s Gemini, has garnered widespread popularity among desktop and laptop users. While these applications don’t necessitate dedicated AI processors, we anticipate consumers upgrading to newer computer models as AI-powered features such as voice assistants, predictive text, and image recognition enhance PC functionality.
Proponents argue that as AI algorithms advance, they will unveil numerous applications requiring greater computational power, thereby driving demand for more powerful PCs and laptops. This reasoning holds merit, as AI-driven gaming and immersive VR applications may amplify the need for high-performance computer hardware.
However, skeptics posit that while AI may enhance user experiences, it might not serve as a significant catalyst for sales. The commoditization of basic AI functions across various devices could diminish the incentive for users to upgrade. Moreover, economic uncertainties stemming from inflation and high interest rates may constrain discretionary IT investments.
Corporate Customers Slow to Adopt Arm-based Windows
Historically, compatibility issues have hindered enterprise adoption of the Arm version of Windows. Many enterprise workflows rely on software optimized for x86 processors, necessitating extensive testing, rebuilding, or replacement to adapt these critical tools to Arm platforms—a resource-intensive endeavor that could disrupt operations.
Seamlessly integrating Arm devices with enterprise infrastructure, including peripheral devices and management systems, has proven more challenging than anticipated over the past few years. This compatibility gap, particularly at the application level, has dissuaded organizations from investing in Arm-based Windows solutions.
Concerns regarding performance parity and optimization on Arm architecture further contribute to enterprise hesitancy. While Arm processor technology has made strides, reservations persist regarding its ability to match x86 processors in resource-intensive tasks.
Businesses reliant on fast and reliable computing performance have been cautious about transitioning to Arm-based Windows machines. However, Microsoft’s recent efforts to assure equivalent or superior performance levels and improved compatibility with existing software ecosystems have alleviated some enterprise concerns about adopting Arm-based Windows solutions.
The latest builds of Arm-based Windows 11 reportedly boast significantly improved program compatibility, performance, and battery life.
Qualcomm’s Snapdragon X Elite Stands Out
Qualcomm is banking on its latest and enhanced mobile computing offerings, which offer best-in-class performance and efficiency—a potential boon for the chip manufacturer amidst this PC upgrade supercycle.
If recent benchmark results hold true, Qualcomm’s new Snapdragon X Elite chipset, unveiled a few months ago, positions the company as a frontrunner in the AI-enabled silicon space, outperforming not only Intel, AMD, but even Apple. It’s noteworthy that Apple released its latest M3 chipsets shortly after Qualcomm introduced its Snapdragon X Elite.
While Snapdragon X Elite chips boast impressive power and energy efficiency, Apple’s chips, including those found in iPhones and iPads, are renowned for their seamless integration with Apple’s hardware and software ecosystem. Apple leverages this holistic approach to finely tune its CPUs for optimal speed and power efficiency, delivering user experiences that often set industry standards. Apple’s robust ecosystem management facilitates rapid adoption of new technologies and optimizations, further bolstering its competitive edge.
Viewed through this lens, Qualcomm’s approach appears to emulate Apple’s integration strategy, particularly at the silicon and operating system levels.
Qualcomm asserts that its internal benchmarking surpasses Apple’s latest M3 chip solutions, a revelation that may surprise fervent Apple enthusiasts, particularly considering that the Snapdragon X Elite apparently outperforms M3 chips in both performance and battery life.
However, comparing the macOS and Windows 11 operating systems complicates the analysis.
In recent months, Qualcomm has permitted reporters, bloggers, and reviewers to benchmark reference design laptops without interference. The company has showcased a new wave of applications tailored to leverage the Snapdragon X Elite’s unique capabilities, particularly its best-in-class neural processing unit (NPU). Moreover, Qualcomm demonstrated several PC games running flawlessly in emulation.
Nonetheless, critics argue that AI’s impact on desktop and laptop sales hinges on various factors—including budgetary constraints, legacy infrastructure dependencies, and AI adoption across industries.
Outlook for AI’s Impact on PC Sales
While no one wishes to dampen spirits, it’s essential to acknowledge that AI’s influence on desktop and laptop sales in the next year or two hinges on a complex interplay of factors. Ultimately, it boils down to AI’s capacity to create compelling transformative user experiences, with business customers likely responding differently from traditional consumers.
AI-powered features may indeed bolster consumer PC sales, but market saturation and economic uncertainty, exacerbated by inflation’s toll on discretionary spending, could limit this potential. With gasoline prices averaging nearly $4 to almost $6 per gallon across various states in the U.S., the average consumer may find it challenging to justify upgrading their legacy PC.
Conversely, corporate and enterprise initiatives focusing on digital transformation and remote work facilitation may drive demand for AI-optimized PCs. While Qualcomm—and to a lesser extent, AMD and Intel—now offer competitive semiconductor solutions to major PC OEMs, the question remains whether AI-enhanced applications are sufficient to persuade users to upgrade.
Undoubtedly, the benefits of these new AI offerings, including reduced latency, extended battery life without compromising performance, and localized AI-generated data management for enhanced security, are enticing.
However, Windows’ fragmented messaging could pose challenges. Each PC OEM will likely tout AI’s benefits independently, potentially confusing consumers and undermining the argument for immediate upgrades.
The Future of AI in PCs
Ironically, Apple’s Worldwide Developer Conference slated for June could fuel the consumer supercycle phenomenon, as the Cupertino company excels at articulating the benefits of AI-enabled usage models unlike any other.
Should Apple fully embrace AI in its new iterations of iOS, macOS, and iPadOS, as rumors suggest, it possesses unparalleled prowess in communicating AI’s benefits in a manner comprehensible to the majority of consumers.
Conversely, the anticipated supercycle is more likely to materialize at the business and corporate levels. Chief Information Officers continually seek methods to enhance productivity and efficiency and are unlikely to wait for Apple to pave the way. Furthermore, most enterprises prefer AI applications to be deployed locally or at the edge for security reasons, making AI-enhanced collaborative tools especially appealing.
