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Canalys: PC market sets stage in Q2 for further growth

AI-capable products are starting to hit the market, providing expectations of a strengthening 2024

It’s what everyone in the PC market has been waiting for: signs of recovery and building momentum.

The industry has been waiting for the graph to start moving upwards after a tough 18 months, with customers finally embracing Windows 11 and being tempted by the arrival of AI-capable PCs.

The latest analysis of the second quarter from Canalys has indicated worldwide shipments of desktops, and notebooks are up 3.4% year-on-year.

Laptops improved year-on-year by 4% and desktops were up by 1%, but the analyst described Q2 as setting the stage for further growth this year. “The PC industry is going from strength to strength with a third consecutive quarter of growth,” said Ishan Dutt, principal analyst at Canalys.

“The market turnaround is coinciding with exciting announcements from vendors and chipset manufacturers as their AI PC roadmaps transition from promise to reality,” he added. “The quarter culminated with the launch of the first Copilot+ PCs powered by Snapdragon processors and more clarity around Apple’s AI strategy with the announcement of the Apple Intelligence suite of features for Mac, iPad and iPhone.”

Dutt said that after a slow start, there were signs that a Windows upgrade was also starting to drive customer investments.

“Beyond these innovations, the market will start to benefit even more from its biggest tailwind a ramp-up in PC demand driven by the Windows 11 refresh cycle,” he said. “The vast majority of channel partners surveyed by Canalys in June indicated that Windows 10 end-of-life is likely to impact customer refresh plans most in either the second half of 2024 or the first half of 2025, suggesting shipment growth will only gather steam in the upcoming quarter.”

Decline in shipments

In terms of vendor market positions, Lenovo remains the largest player, followed by HP and Dell. Out of those three, it was only Dell that reported an annual decline in shipments, down by 2.4% year-on-year.

Of the rest, Asus had a particularly strong quarter, delivering 17.3% growth, sitting in fifth place just behind Apple.

Windows 11 is one major influence on the PC market, but there are also expectations that AI-capable PCs will start to filter in this year, accounting for between 10-15% of sales, as more products become available.

A raft of products was recently announced from the leading hardware vendors as they outlined the products that would be in the market now and in the second half of the year.

Earlier this year, Canalys shared an optimistic forecast that 19% of PCs shipped this year will be AI-capable. Once the products start hitting the market, momentum will continue to build, with the portion of devices being sold using the technology hitting 60% by 2027.

Another positive for the channel is that the majority of customers for those products will be commercial, with most PCs sold to business customers being AI-enabled by 2027.

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