AI PC sales slow amid high costs, limited software

AI PC sales have yet to take off, despite the hype from computer makers.

In the fourth quarter of 2024, PC shipments grew 1.8% from a year ago, to 68.9 million units, IDC reported this week. For the full year, shipments increased 1%, to 262.7 million PCs.

Overshadowing the hype around AI PCs is the lack of software with capabilities that would convince consumers to pay a premium for fancy hardware, such as neural processing units, to run AI workloads. The same is true for enterprises that are skittish about spending more while facing macroeconomic uncertainties.

"When the industry is trying to push new AI PCs that come with higher cost at a time when use cases are still being vetted and budgets are tight, that is clearly going to be a challenge," said Ryan Reith, program vice president for IDC's device-tracker reports, in a statement.

What worries enterprises is President-elect Donald Trump's threat of new and increased tariffs against China, where many companies have suppliers. Those macroeconomic concerns have overshadowed the marketing around AI PCs, Reith said.

Recent forecasts from two of the largest global PC makers reflected the slowness of PC upgrades. Earnings and revenue forecasts for the current quarter from Dell Technologies and HP, respectively, disappointed Wall Street, sending shares downward in late November.

In the fourth quarter, PC shipments from HP and Dell fell 1.7% and 0.2% year over year, respectively, according to IDC.

Executives from both companies expect sales to pick up in the second half of this year due to more AI adoption and Microsoft's end of support for Windows 10 in October. The latest operating system, Windows 11, requires PCs with more horsepower, and analysts expect enterprises to opt for AI PCs to future-proof their purchases. Companies typically hold on to PCs for three or four years before upgrading.

IDC is optimistic that AI will eventually drive PC sales higher. "[W]e maintain the view that the impact that on-device AI will have on the industry will be positive, even if the inflection point is delayed," Reith said.