Analyst: Olivier Blanchard
Publication Date: Nov 25, 2024
Document #: AIESOB202411
An impending PC refresh cycle, driven by a confluence of factors including the end of Windows 10 support in October 2025 and the arrival of powerful new NPU-enabled AI PCs, points to the possibility of a supercycle for the PC segment. But skeptics rightly question whether the term “supercycle” applies to this transition, challenging us to reframe both the term and expectations about the pace and scale of the next wave of disruption in the PC segment.
Key Points:
- Adoption of AI PCs between now and Q4 2025, and particularly Copilot+ class AI PCs, is being driven by several key factors in addition to the established PC refresh cycle: improvements in processing performance, improvements in battery life, the desire to futureproof hardware (PCs) for AI, and the end of support for Windows 10 (scheduled for October 2025.
- Excitement about new AI use cases and/or improved UX is not, as of now, a primary adoption factor for AI PCs. Because both the identity and inherent value proposition of AI PCs as a category are tied to AI-powered applications, the absence of compelling AI-powered applications is creating some confusion about the actual market opportunity for AI PCs, and demand drivers for the category going into 2025.
- Competition among Windows PC OEMs and their processor vendors (currently: Intel, AMD, and Qualcomm) points to a reset in the PC segment, in which traditional or pre-AI PCs will steadily be replaced by AI PCs.
Overview:
The simplest and safest way to think of the AI PC category is to see it simply as the natural evolution of the PC in the age of AI. It is entirely possible that, once the transition from traditional PCs to AI PCs is complete sometime around 2030, AI will be so ubiquitous that we will collectively revert to just calling AI PCs “PCs” again. The AI component will be implied, just as it will be implied in every other category: Phones, wearables, XR, vehicles, etc.
Having said that, the immediate primary value of AI PCs has very little to do with AI: Today, agentic AI remains mostly conceptual. ISVs (independent software vendors) are still in the development mode. Don’t get me wrong: The AI software layer is coming. Assistants and agents will begin to turn up on our devices before long. Productivity improvements borne out of agentic AI integrating itself into time-consuming tasks are coming. But for now, the AI value proposition of the AI PC may not be driving the lion’s share of demand. AI PCs are, first and foremost, just better PCs, and demand drivers, at least currently, reflect that familiar value proposition.
This isn’t to say that AI isn’t also a factor in the PC refresh cycle’s momentum. PC processor vendors Intel, AMD, and Qualcomm are all prioritizing on-device AI capabilities in their chip designs, essentially driving the PC segment toward AI. Their PC OEM partners are also accelerating their product roadmap’s transition to AI PCs and expect the majority of new PCs shipping to customers to be AI PCs by 2028. ISVs and developers are already building on the initial first round of AI applications and agentic software for enterprise, commercial mid-market, and consumer segments. Agentic assistant software is already driving UX design roadmaps for major PC, mobile, automotive, and IoT platforms. The new agentic layer this will produce will become the next interface between users and apps.
The next 6-12 months might not feel like the groundswell one might expect from a “supercycle,” however. At least not yet. It is important to understand that the engine of disruption driving this transformative reset of the PC segment will likely take a year to find its traction in consumer, commercial, and enterprise markets and address asymmetries between hardware, software, and use cases before achieving its cruising speed. Understanding how and when all of the pieces are likely to come together will be critical to effectively navigate this transition and make the most of the opportunities it brings to market.
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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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AMD’s AI PC Update with Six Five Media at AMD Advancing AI
Author Information
Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies.
