Microsoft’s unveiling of new-generation artificial intelligence (AI) PCs, as announced by CEO Satya Nadella, is poised to revolutionize the personal computing landscape. These devices are equipped with the ability to independently execute complex AI algorithms, heralding a significant impact on overall PC shipments. Despite their initial limited release, analysts anticipate a 5% increase in PC shipments and up to a 15% surge in revenues by December 2025 due to the rising adoption of Microsoft’s AI PCs. According to data from market researcher IDC, PC shipments, including tablets, reached 13.9 million units as of December 2023, with laptops dominating sales with a 75% share. At an average selling price of $900 (~ ₹75,000), this translated into net revenues exceeding $9.5 billion. Estimates indicate that laptop shipments alone could surpass 11.5 million units by December 2025, propelling net revenues to nearly $12 billion, an impressive 26% growth in just two years. Analysts attribute a significant portion of this projected growth to the introduction of Microsoft’s AI PCs. These devices, branded as ‘Copilot+ PCs,’ will incorporate a dedicated AI co-processor, or neural processing unit (NPU), bolstering their processing capabilities. Microsoft will initially launch surface-branded laptops, but third-party adoption is imminent, with industry giants like Dell, HP, and Lenovo poised to release Copilot+ PC laptops in the coming months. AI PCs offer offline support for tasks such as file recall, generative image editing, and local search queries. Yusuf Mehdi, Microsoft’s executive vice president and chief marketing officer, stated in a recent blog post that the AI features will “remove previous limitations on things like latency, cost and even privacy to help you be more productive, creative and communicate more effectively.” However, analysts cautioned that initial adoption of AI PCs may be sluggish due to their higher price point compared to standard laptops. Navkendar Singh, associate vice-president at market researcher IDC India, commented, “The new batch of hardware would be more expensive than the average market selling price of laptops in India. This in turn would mean that the uptake could initially be slow, and any major impact in India will likely not be seen at least until next year.” He added, “Ultimately, this will definitely have a positive impact, but much extensive efforts will likely be put in marketing activities to explain the benefits of the AI capabilities to users—before the uptake ramps up. Eventually, this will see Microsoft go after Apple’s hardware prowess, especially with the latter’s MacBook Air series of laptops.” Microsoft is aiming to rival Apple’s dominance in the consumer laptop market, particularly its MacBook Air series, which starts at $1,200 in India. Analysts believe Microsoft is focusing on Apple’s MacBook Air range, a strategy that Nadella has highlighted in interviews this week. To compete with Apple’s M3 processor, which offers 18 trillion operations per second (TOPS) in AI performance, Microsoft requires a minimum of 40 TOPS for its Windows-powered AI laptops. Analysts anticipate that this distinction, combined with the extensive market reach of Windows, will enable brands like Dell, HP, and Lenovo to provide competitive pricing, potentially reshaping consumer laptop preferences.
Microsoft’s AI PCs Set to Transform Personal Computing Landscape
