AI PCs Hyped by Microsoft and Qualcomm: Much Talk, Little Action?

The surging tide of artificial intelligence (AI) technology has prompted tech giants like $Microsoft(MSFT.US)$ and $Qualcomm(QCOM.US)$ to vigorously promote "AI PCs" – laptops and desktops equipped with dedicated processors to accelerate AI functions such as personal assistants and automated task execution. However, despite the grand marketing campaigns, the actual shipment of AI PCs remains limited, with their market impact yet to be fully realized.

According to estimates from the industry research firm IDC, only about 3% of the PCs shipped globally this year meet the AI processing capabilities threshold defined by Microsoft. This figure underscores the current state of the AI PC market: while the future looks promising, widespread adoption will take time. Further projections indicate that by 2026, AI PCs are expected to account for approximately 20% of global new PC shipments, suggesting a gradual growth trajectory over the next few years.

Potential Amid Challenges
Despite their current functional limitations, AI PCs hold significant premium potential. Samik Chatterjee, an analyst at JPMorgan Chase, predicts that the average starting price of new-generation AI PCs based on Qualcomm chips will be roughly 48% higher than that of non-AI PCs, signaling a potential wave of high-end PC purchases driven by AI features. Especially for consumers, businesses, and schools that have already purchased basic laptops during the pandemic, the added functionalities of AI PCs could be a compelling reason to upgrade.

Initial Signs of Consumer Acceptance
Data from market research firm Circana reveals that during new product release weeks, one in five computers sold were AI PCs, indicating that some consumers have already started embracing this technology. Early adopters, such as tech enthusiasts and content creators, have been quicker to adopt the new machines. However, the general public may still be "perplexed" about the actual value of AI PCs. Qualcomm claims that its more efficient AI chips based on the Arm architecture enable AI PCs to last for days on a single charge, though Avi Greengart, an industry analyst at Techsponential, notes that battery life, rather than AI, remains the primary selling point for laptops today.

Technical and Ecosystem Hurdles
The widespread adoption of AI PCs faces challenges in terms of technical compatibility and ecosystem development. Due to differences in chip architectures, AI PCs based on Arm may encounter compatibility issues with software written for Intel or AMD chips, particularly older versions still in use by many enterprises. While mainstream software like Office, WhatsApp, and Photoshop have been optimized for Arm-based systems, Erik Woodring, an analyst at Morgan Stanley, warns that many legacy apps used by businesses may not receive support on new Arm systems, potentially limiting enterprise adoption of AI PCs.

Future Outlook: The Entry of Intel and AMD
It is worth noting that the processor giants, $Intel(INTC.US)$ and $Advanced Micro Devices(AMD.US)$ , are expected to introduce their own AI PCs later this year, potentially shaking up the market. These x86-based AI PCs could mitigate compatibility issues, further driving the adoption of AI PCs. As technology matures and ecosystems evolve, AI PCs are poised to emerge as a new growth engine in the PC market, offering consumers and businesses smarter, more efficient computing experiences.