IDC: Generative AI a 'Watershed Moment' for PC Market

Is AI the shot in the arm that the beleaguered PC market needs? According to researchers at IDC, it's one of them, at least.

Data released this week by the analyst firm shows that worldwide PC sales continued their downward slide in the third quarter of 2023, totaling just 68.2 million compared to 73.8 million at the same time last year. That's a year-over-year decline of 7.6 percent.

The drop is not a surprise, given the confluence of persistent high inflation, lingering recession fears, an actual recession in the tech sector marked by scores of layoffs, the ghost of pandemic-related budget cuts, and undoubtedly many other economic nuances that this writer is not equipped to cover.

However, IDC identified a small handful of trends that could stop the bleeding. Among them is the rising interest among PC users, both corporate and consumer, in generative AI. 

"Generative AI could be a watershed moment for the PC industry," said IDC research vice president Linn Huang in a prepared statement. "While use cases have yet to be fully articulated, interest in the category is already strong."

By "AI PCs," IDC presumably means devices that provide users with ready access to generative AI capabilities. Case in point is the forthcoming crop of Windows-based PCs. These Windows 11 devices will have generative AI features integrated in nearly every component via Microsoft Copilot.

"AI PCs promise organizations the ability to personalize the user experience at a deeper level all while being able to preserve data privacy and sovereignty," Huang said. "As more of these devices launch next year, we expect a significant boost to overall selling prices." 

Besides AI, IDC pointed to other factors that indicate a PC market recovery is coming -- if not imminently, then eventually. For one thing, PC sales are actually up from quarter to quarter, "indicating that the market has moved past the bottom of the trough." For another, PC inventory is "near healthy levels." 

In addition, multiple versions of Windows 10 -- currently the most-used Windows operating system, running on nearly three-quarters of all Windows PCs -- reached their end-of-life this year. In another two years, the very last version of Windows 10, 22H2, will also fall out of support. Per IDC research manager Jitesh Ubrani, that should trigger a PC buying spree of sorts next year.

"The PC industry is on a slow path to recovery as a device refresh cycle and end of support for Windows 10 will help drive sales in the second half of 2024 and beyond," Ubrani said.

But, he cautioned, don't expect much of the PC market for the rest of 2023: "In the meantime, the PC industry will unfortunately experience more pain."

About the Author

Gladys Rama (@GladysRama3) is the editorial director of Converge360.