Heard on the Street: AI is Not Selling PCs Yet -- WSJ

By Dan Gallagher

Personal computers may be getting smarter, but that alone isn't enough to get them flying off the shelves.

Global PC sales in the third quarter slipped from the same period last year, according to new data from market research firms IDC and Gartner. That follows two straight quarters of gains--a surprising turn considering recent high-profile launches of devices with artificial intelligence processors built in.

According to IDC's tracking, PC shipments fell 2.4% year over year to about 68.8 million units in the third quarter. Lenovo and HP saw slight gains in unit sales during the quarter while Dell and Apple saw their sales fall on a year-over-year basis, IDC said.

Sales of AI-enabled PCs were not specifically broken out. But both firms noted weak consumer demand in the new category. "Even with a full lineup of Windows-based AI PCs for both Arm and x86 in the third quarter of 2024, AI PCs did not boost the demand for PCs since buyers have yet to see their clear benefits or business value," Gartner analyst Mikako Kitagawa noted in Wednesday's report.

"While we expect AI to reach ubiquity at some point at the end of this decade, the ramp up towards mass market will take longer than expected, well into 2026," IDC analyst Linn Huang said in her firm's report.

That could splash some cold water on hopes that AI would finally lift the PC category out of its latest slump. Global PC sales have fallen nearly 14% annually over the past two years following a boost in sales sparked by Covid lockdowns, according to IDC's data.

In a report Wednesday, Toni Sacconaghi of Bernstein predicted flattish PC sales for this year--"a relatively disappointing year given expectations that corporate and Covid refresh cycles would begin." Asiya Merchant of Citi was also lukewarm. "We believe PC demand recovery will be bumpy and recent checks in the PC ecosystem suggest the near-term PC refresh opportunity remains protracted," she wrote Wednesday. PC buyers haven't bought into AI yet.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

October 09, 2024 13:00 ET (17:00 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.