Is the Global PC Market Declining After Accelerating Recovery?

On October 9th, the latest preliminary results from the International Data Corporation (IDC)'s "Worldwide Quarterly Personal Computing Device Tracker" revealed that in the third quarter of 2024, global shipments of traditional PCs (Personal Computers) decreased by 2.4% year-on-year, reaching 68.8 million units.

However, data released by the third-party agency Canalys showed that in the third quarter of 2024, the global PC market achieved growth for four consecutive quarters, with a total shipment increase of 1.3% for desktops, notebooks, and workstations, reaching 66.4 million units.

Previously, data from both IDC and Canalys indicated that the global PC market had warmed up after several consecutive quarters of decline. Reporters from China Business News noticed that although there are slight differences in the third-quarter data from various agencies, overall, the global PC market's third-quarter shipment performance was somewhat worse than that of the second quarter, and Apple's shipments during the third quarter did not perform well compared to the same period. According to IDC data, in the third quarter, Apple's PC shipments decreased by 24.2% year-on-year, falling to 5.3 million units. At the same time, Canalys data also showed that Apple's PC shipments during the same period were 5.1 million units, a year-on-year decline of 17.5%.

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Looking at the long term, the overall global PC market still has significant growth potential. Bryan Ma, Vice President of IDC's Worldwide Device Tracker, believes that although there are still downward risks in the current geopolitical environment, there is enough upward space next year (2025) to lift the market to a moderate single-digit growth.

Third Quarter PC Shipments Released, Apple's Year-on-Year Double-Digit Decline

The data released by Canalys for the second quarter of 2024 showed that the global personal computer market was gaining momentum, with shipments of desktops and notebooks reaching 62.8 million units, a year-on-year increase of 3.4%. Notebook shipments (including mobile workstations) reached 50 million units, a year-on-year increase of 4%. Desktops (including desktop workstations) accounted for 20% of the total PC market volume, slightly increasing by 1%, with a total shipment of 12.8 million units.

IDC's data for the same period also reflected a similar trend. In the second quarter, global PC shipments reached 64.9 million units, a year-on-year increase of 3%. Ryan Reith, Vice President of IDC's Worldwide Device Tracker, stated: "Two consecutive quarters of growth, coupled with a significant amount of market promotion around AI PCs, and the arrival of an important commercial replacement cycle, have boosted the PC market."

Behind the recovery, at the upstream of the industry chain, chip giants NVIDIA, Intel, and AMD are competing to release new products. In the second quarter, the first Copilot+ PC with a Snapdragon processor was released; Intel is laying out commercial AI PCs and not long ago also announced the architectural details of the next-generation AI PC flagship processor, Lunar Lake.

The year 2024 is the inaugural year for AI PCs, with traditional PC manufacturers such as Lenovo, Dell, and Asus launching numerous AI PC products to seize the PC market.In terms of terminal manufacturers, Apple Inc. unveiled the Apple Intelligence feature suite for Mac, iPad, and iPhone at WWDC; Lenovo, Dell, Acer, Asus, HP, and other manufacturers also launched a series of brand-new AI PCs.

Data from both IDC and Canalys show that in the second quarter of global PC shipments, except for Dell's year-on-year decline, Lenovo, HP, and Apple all achieved positive growth.

However, entering the third quarter, the global PC market shipment performance was somewhat inferior compared to the second quarter. IDC data shows that in the third quarter of 2024, global traditional PC shipments decreased by 2.4% year-on-year, reaching 68.8 million units. Why did the market fall into a year-on-year decline situation amidst continued recovery in multiple quarters and stimulation by new AI PC products? IDC pointed out that the main reasons for this result were the impact of factors such as rising costs and inventory replenishment on terminal manufacturers, and the surge in shipments in the previous quarter (second quarter) also led to a slight slowdown in the third quarter.

Canalys data shows that in the third quarter of 2024, the global PC market achieved growth for four consecutive quarters, with the total shipment of desktops, notebooks, and workstations increasing by 1.3%, reaching 66.4 million units. The overall market is still growing positively, but Canalys Chief Analyst Ishan Dutt also mentioned: "The growth in the third quarter was relatively moderate."

The reporter noticed that compared to the second quarter, the shipment of the top brands in the third quarter showed a differentiated trend year-on-year, and Apple seems to have dragged down the overall market shipment.

IDC's published data ranking of top manufacturers shows that Lenovo, Asus, and Acer achieved positive year-on-year growth in shipments, among which Asus grew by 10% year-on-year, HP was on par with the same period last year, while Dell, Apple, and other manufacturers' shipments declined year-on-year, with Apple's shipments declining by 24.2% year-on-year.

Canalys's data also shows that among the top five in the market, Lenovo and Asus achieved positive year-on-year growth in shipments, among which Asus grew by 15.8% year-on-year, HP was on par with the same period last year, while Dell and Apple's shipments declined year-on-year, with Apple's shipments declining by 17.5% year-on-year to 5.1 million units.

Canalys analyst Ye Maosheng analyzed for the reporter that the main reason for Apple's PC shipment double-digit decline in the third quarter of this year was that the shipment base of Apple's PCs in the third quarter of last year was very high, being the highest in the past eight quarters, and in the third quarter of this year, Apple's PC shipment reached 5.1 million units, which is considered a normal quarterly shipment volume.

AI will be the key to the future market.

AI PCs are one of the main factors expected to drive the growth of the market in the future.According to Morgan Stanley's research report, AI PCs will become the key factor driving the next round of growth in the PC market, with their penetration rate expected to rise from 2% in 2024 to 65% in 2028. However, at present, due to the early stage of AI PC development, some consumers do not have a strong perception, and it is difficult for AI PCs to significantly boost the market in a short period.

IDC China's Senior Research Manager, Chen Shuxin, pointed out to reporters that the launch of AI PCs will indeed promote the overall market, but it is difficult to have a significant short-term promotion because the overall market's large models have not yet been implemented, and the demand stimulation on the user side is still insufficient. In the long term, as large models are implemented and the ecosystem continues to enrich, AI PCs will definitely bring about the demand for machine replacement. Related upstream and downstream demands will also be further increased, including the demand for higher memory and stronger cooling requirements.

At present, the growth of the PC market driven by AI also faces certain challenges. For example, in the Chinese market, users still cannot use all the features of Copilot. Chen Shuxin believes that the competition of AI PCs in the Chinese market is more prominent in the intelligence of each PC manufacturer, so the ability of large models and the cooperation with related software become crucial. At the same time, in addition to computing power, AI PCs will also have higher requirements in corresponding aspects such as memory and cooling, and prices will also increase accordingly. How to make AI PCs benefit more people and how to balance price and performance are also issues that PC manufacturers need to face.

Many analysts pointed out that AI technology has the greatest short-term promotion for the commercial PC market. Morgan Stanley's research report also shows that the launch of AI PCs can help catalyze the update and iteration of commercial PCs and accelerate the growth of the PC market in 2025.

Despite the global PC market being volatile in the second quarter, industry insiders believe that there is still a large growth space in the global PC market, and AI will be the key to future market growth.

IDC's Global Mobile Device Tracking research manager, Jitesh Ubrani, said that the demand for PCs in consumer and commercial markets has rebounded. However, due to economic recovery and the back-to-school season in North America, demand is still mainly concentrated in entry-level products. However, the launch of new AI PCs such as Qualcomm's Copilot+ PC, similar chips from Intel and AMD, and Apple's expected M4 chip-based Mac, is expected to start driving the growth of the high-end market in the next few months.

Recently, there have been rumors that Apple will hold a second autumn press conference in October 2024, mainly focusing on new Mac and iPad products.

Canalys' Chief Analyst Ishan Dutt also said that although the growth in the third quarter is relatively moderate, the recovery of the PC market has fully unfolded, and some positive signals indicate that the performance in the next few quarters will be stronger. The demand from enterprises is particularly obvious, and there is only one year left for enterprises to upgrade to Windows 11 and avoid delayed payment of IT support fees. It is expected that this year, commercial demand will remain at a high level.

IDC's Vice President of Devices and Display Research, Linn Huang, pointed out that although we expect AI to become popular in the next decade, the transition period to the mass market will be longer than expected, and it will not be widely applied until 2026. The changes in the next year will mainly be about developing software, using case scenarios, and the target audience of AI hardware.