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The PC Segment’s AI Inflection Point: Your 2024-2025 Copilot+ PC Cheat Sheet

The PC Segment’s AI Inflection Point: Your 2024-2025 Copilot+ PC Cheat Sheet

I just got back from the Computex show in Taipei with a headful of insights about the future of the PC segment, so let me share six of them here with you.

1. AI Hype Has Nothing to do With It; The Era of AI PC is Here

Whether or not you believe it, the hype around AI PCs doesn’t matter. What matters is that (1) AI PCs are here and (2) all new PCs above a certain price point will likely be AI PCs from now on. It doesn’t matter that the PC segment hasn’t yet found the killer app that will make the value of AI PCs crystal clear to users. It doesn’t matter that most of the apps and use cases for on-device AI haven’t hit the market yet. The hardware is here. Microsoft’s Windows team is committed. AI PCs are the future of the PC category.

Watching HP CEO Enrique Lores state that he believes that 10% of all new HP PC shipments in the next year will be AI PCs, and that the number will grow to 50% in the next three years, should help set the stage for how locked-in the industry is. Obviously, not every PC OEM might be as bullish on the pace of the transition to AI PCs as HP, but most understand that when it comes to tech, it is extremely rare to put the genie back in the bottle. AI PCs are, at their core, just better at doing PC things than traditional PCs. And given how competitive the PC market is, why would any major PC OEM not invest in technologies and IP that will allow them to remain competitive in their own industry? In other words, now that AI PCs are here, there is no going back to pre-AI PC performance and UX.

2. Why are AI PCs Better Than Traditional PCs?

In the interest of keeping things short, let’s just focus on two core value propositions: (1) better overall performance and (2) new features and capabilities.

On the performance front, AI PCs come equipped with significantly better CPUs and GPUs than their traditional predecessors, but also a relatively new type of chip called an NPU or a neural processing unit. Because NPUs are capable of performing complex AI-focused tasks quickly and with relatively low power consumption, PC users will notice faster, smoother performance from their PCs, including when running multiple apps simultaneously. Current industry consensus is that for an AI-capable PC to be considered a true AI PC, its NPU has to be able to run 40 or more TOPS (trillions of operations per second). That will likely change as systems improve, but that is the threshold. It also appears to be the NPU performance threshold that Microsoft has set for the entire Copilot+ PC category, which we will dive into in a moment. The overall point here though is that even without obvious AI use cases defining the AI PC category yet, AI PCs are vastly better PCs than their predecessors, and that alone is the reason to take their disruption of the segment seriously.

On the new features and capabilities side of our value proposition discussion are all of the new and emerging AI-forward tasks and workloads that AI PCs will be able to perform. Top of mind for me are agents, essentially smart bots that help PC users complete tasks faster and better. Having spent a little time in Redmond during Microsoft’s Build event last month, I have reason to believe that agents will be a central theme in the Windows PC (and specifically Copilot+ PC) AI experience. Other use cases include AI assistants, live translation, and improved filters for video calls, running language and mixed models directly on the PC (rather than pushing them out to the cloud), and a lot of on-device generative AI for productivity tools and creative solutions. More on that in a moment.

3. With Copilot+ PCs, Microsoft Has helped Create Needed Clarity and Structure for the AI PC Segment… But There’s a Catch

A year ago, one could have argued that any PC equipped with an NPU is technically an AI PC. And technically, sure. Fine. We can go there. But with the introduction of Copilot+ PCs, Microsoft pulled a very useful hat trick: It created order in a segment that might have otherwise been all over the place with ill-defined AI PCs featuring wildly different specs. Microsoft’s launch of the Copilot+ PC category provided a framework – almost an industry standard – for high-end “next gen” AI PCs. As discussed in the previous section, for a Copilot+ PC to qualify as a Copilot+ PC, its NPU must handle 40+ TOPS… and be supported by Microsoft as a Windows Copilot+ PC.

And that’s great, but here’s the catch: Without getting too deep into the strategy and politics of this, the Windows team has been working diligently with Qualcomm over the course of the past few years to bring Arm-based PCs into the Windows ecosystem. If you believe that Microsoft was interested in Arm-based Windows PCs to compete against Apple’s Arm-based M-series chips both in the consumer and commercial segments (or at the very least hedge against Apple’s market share gains against Windows PC in the enterprise) you aren’t wrong. But if you believe that Microsoft was also looking to bring more power-efficient, thermally disciplined, faster, thinner, AI-capable PCs to those two segments, you also aren’t wrong. Long story short: Microsoft saw the potential that Qualcomm’s Arm64 based Snapdragon X PC platform brought to the PC market, and focused a lot of its efforts on helping get the platform ready for the AI PC era, and specifically for its vision for Copilot+ PCs (as evidenced by the decision to power the latest Microsoft Surface tablets and laptops with Snapdragon X chips). What we saw last month, with the simultaneous launch of Snapdragon X powered Copilot+ PCs from Acer, ASUS, Dell, HP, Lenovo, Microsoft, and Samsung, was the culmination of this very targeted and coordinated effort.

But what about Intel and AMD, you ask? Well, that’s where things get a bit complicated. Currently, only Qualcomm’s Snapdragon X Elite and Snapdragon X Plus (the slightly less premium version of the platform) power Copilot+ PCs. Microsoft did confirm at the Copilot+ launch event that they were working as fast as they could to bring Intel and AMD into the ecosystem – presumably by the end of the year. AMD, for its part, announced, alongside several major PC OEMs, their own AI-capable (Ryzen AI) chipsets and Copilot+ ready/capable PC launches, and while Intel was uncharacteristically short-winded about the performance of its own upcoming Lunar Lake chips, we know that it is only a matter of time before Intel enters the Copilot+ PC space with its silicon.

None of this is bad. Competition and choice are good. Silicon diversity is healthy for the ecosystem. But the split between X86 and Arm64 in the PC segment is going to bring a bit of new complexity to the space, and everyone needs to be aware of that. Especially if the performance characteristics of Intel and AMD powered Copilot+ PCs creates a very different user experience than the Snapdragon X platform’s more Apple-like performance. Bookmark that thought for later, because we will be revisiting it a lot in the coming months.

4. X86 vs Arm64 Performance Could Create Two Distinct Subsegments Within the Copilot+ PC Ecosystem

As much as I like what Microsoft did when it created the Copilot+ PC category, I’m not so sure I love the lack of distinction between X86 PCs (Intel and AMD) and Arm64 PCs (Qualcomm’s Snapdragon X). From Microsoft’s perspective, or more specifically a Windows 11 perspective, I get it: It doesn’t matter what the chip is. A Copilot+ PC is a Copilot+ PC. Same from a PC OEM perspective: If a customer prefers an Intel Copilot+ PC, or an AMD Copilot+ PC, or a Snapdragon X Copilot+ PC, let them pick the specs that work best for their needs. Portfolio diversity FTW. But from a PC user perspective, the distinction between all three may end up being more nebulous than it needs to be, with potentially very different user experiences. I hope that chipmakers, PC OEMs, channel partners, and retailers will invest some resources into educating the market as to the difference (advantages and disadvantages) of each platform.

It is far too early to know how Copilot+ PCs powered by Qualcomm, AMD, and Intel chips will perform against each other since AMD-powered Copilot+ PCs aren’t technically part of the Copilot+ ecosystem yet and Copilot+ PCs powered by Intel’s new Lunar Lake chips aren’t available yet. However, we can reasonably infer that Copilot+ PCs powered by Qualcomm’s Snapdragon X platform will deliver significantly better thermal performance, performance per watt, and battery life at the very least. Intel is already suggesting that it will be delivering comparable battery life, but we’ll have to wait to find out to what extent that promise will bear fruit.

On raw processing and compute, Qualcomm, AMD, and Intel’s very different approaches to system performance may end up favoring distinct use cases, or rather user personas. A CEO, a graphic designer, a business analyst, a design engineer, a salesperson, and a logistics manager have very different system requirements, and each chipmaker’s approach to Copilot+ PC performance will deliver PCs more or less tailored to those specific needs.

5. How Qualcomm, Intel and AMD Copilot+ PCs May Already be Picking Their Lanes

My quick take on segmentation and differentiation between Qualcomm, AMD, and Intel Copilot+ PCs coming out of Computex last week: Walking away from all of the keynotes and discussions I was part of in Taipei, I couldn’t help but begin to see the blurred edges of the lanes the three chipmakers and their PC OEM partners appeared to be choosing, at least at this very early stage of the Copilot+ PC era.

Qualcomm was out of the gate first with three distinct value propositions: the PC reimagined, Apple-like performance, and multi-day battery life. Let’s table the PC reimagined narrative for now, as the Copilot+ category as a whole aims to redefine PC experiences in a vaguely silicon-agnostic way. But the Apple-like performance and multi-day battery life angles, both of which were heavily emphasized by Microsoft’s Surface team at Build, are probably the value propositions that will be the stickiest for users: All of the advantages of Apple silicon and MacBook performance, but on a Windows PC with crazy-good battery life. AI experiences and features aside, that is a very distinct lane for the Snapdragon X platform to own, a clear market differentiator, and a very attractive dual value proposition. Does it mean that Qualcomm can’t or won’t expand on that? No. But it is a great place to start, especially as the company works to establish itself against two massive Windows PC chip incumbents such as Intel and AMD. If Qualcomm can capture even 1% of the market in the next 12-18 months, we could reasonably see Snapdragon X PCs crossover market share by double digits by 2030.

Note: If you are expecting Qualcomm to completely displace Intel and AMD, you are looking at the opportunity through the wrong lens. To paraphrase Sam Altman, find the nichest of niches and start there: with that segment of users that desperately needs your solution. Solve that problem for them, and then expand into broader areas. Don’t try to take on an entire mature market, at scale, right out of the gate. If Qualcomm’s strategy in the PC market is to establish itself as the Windows PC segment’s only legitimate Apple competitor, and as the platform that delivers PCs that won’t leave highly mobile users constantly searching for power outlets when they are on the go, no matter what else they add on top of that, I can think of far worse places to start.

That leaves AMD and Intel to battle each other in the traditional X86 space. Here, the lanes look essentially the same as they have for some time, with AMD already turning up in premium PCs with higher-than average performance requirements, and Intel presumably looking to establish scale and maximum market penetration with chips designed to power different tiers of multi-use PCs. Hope that Qualcomm doesn’t start eating into its market share too quickly.

In other words, for the next 12 to 18 months at least, the Copilot+ PC space should look a bit like this:

  • MacBook Air performance + multi-day battery life: Qualcomm/Snapdragon X
  • Extremely heavy workloads with significant power consumption needs: AMD/Ryzen AI
  • Anything that falls somewhere between the two scenarios above: Intel/Lunar Lake, when it finally enters the Copilot+ ecosystem.

I caught an early glimpse of this dynamic during the ASUS keynote at Computex, during which two new heavy-duty ProArt Copilot+ PCs were introduced (the ProArt P16 and PX13), both powered by AMD Ryzen AI chips, alongside the upcoming highly portable, rugged ProArt PZ13, designed to be creators’ hike and camping-friendly ProArt tablet, powered instead by the Snapdragon X platform.

While I expect Qualcomm’s Snapdragon X Elite tier to eventually jump from MacBook Air performance to MacBook Pro performance, right now, the Copilot+ PC space is shaping up to have these three distinct lanes for Qualcomm, AMD and Intel, and their PC OEM partners.

6. The Near Future of AI in the PC Segment

As I’ve alluded to earlier, the defining use case for on-device AI in the PC segment remains elusive. I have found this to be a common thread at every PC-focused event this year: No one can really point to a specific “killer app” that makes the AI in AI PCs all that compelling. Most of the demonstrations I’ve seen that involved generative AI felt a bit tired and derivative, and while I appreciate the technical achievement required to move training and inference from the data center to the PC, from a UX standpoint, the industry still falls short of a full pitch.

Given how much bandwidth and resources are being invested in the developer ecosystem, and how much potential AI has as a whole, it makes sense for consumers and commercial customers to start refreshing/upgrading their PCs now. There is value in getting the hardware now, and reaping the benefits of AI-forward software and AI-accelerated features once they become available. Also, given Copilot+ PCs performance improvements, it just makes sense to upgrade from traditional PCs. So, just looking at the impact of the Copilot+ PC category on PC shipments, I anticipate signs of uplift as soon as in Q3 2024, with growth accelerating in 2025 once Lunar Lake-powered Copilot+ PCs hit the market.

The AI-forward UX discussion may require its own space, but for now let me again point to agents. My discussions with Windows and Surface product teams in Redmond kept circling back to the future of agents: those little AI assistants that help PC users complete tasks faster and better. The core value proposition for AI PCs right now, for me at least, is the ability to take tasks that used to take hours, if not days to complete, and cut them down to minutes. Consider agents built tight into Word, PowerPoint, Excel, and Outlook that can create a deck, organize a spreadsheet, create an infographic, transcribe meeting notes, summarize a report, and manage emails in minutes, based on simple text or voice prompts, or simply on process intelligence that learns how to serve users better with every interaction.

Consider the massive amounts of time saved by this new type of productivity solution that lives right on a PC (and doesn’t require an internet connection). Think of all of the time we can get back from becoming this efficient. What users do with that reclaimed time is up to them: They can choose to be even more productive, or they can claim that time back for themselves. That choice, in and of itself, is the value created solely by on-device AI agents in Copilot+ PCs. Whatever comes next, whatever next generation of AI apps, the transformative potential of on-device agents alone should make the AI PC category, particularly the Copilot+ PC category, exciting for users in both the consumer and commercial segments. That specific value still needs to be articulated by PC OEMs and Microsoft. But that too will likely help drive demand for these new types of PCs, which will accelerate the transition from traditional PCs to Copilot+ AI PCs.

Overall, the transition to AI PCs is a tide that lifts all boats in the PC space, for PC OEMs and silicon vendors. I expect the PC segment to more than make up for its recent slump in the next 36 months. Watch for acceleration in PC shipments starting in late H1 2025. Also watch for Snapdragon X-powered Copilot+ PCs to leverage AI to carve out their own distinct niche within the Windows PC segment and start making steady market share gains against Intel. Exciting cycles ahead.

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.

Other Insights from The Futurum Group:

New Snapdragon-Powered Copilot+ Windows PCs Redefine the PC Market

Transforming the PC Landscape: Microsoft’s Vision for AI Integration with Copilot+ PCs – Six Five On The Road

Inside the X Elite: Unpacking Qualcomm’s Next-Gen Performance and Features – Six Five On The Road

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.  Read Full Bio.

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