Despite the buzz surrounding the latest artificial intelligence (AI) PC models, evidence suggests that the immediate future of PC demand is not looking promising.
KeyBanc Capital Markets analyst John Vinh has revised his 2024 laptop PC unit forecast, projecting only a 1% year-over-year growth instead of the previously estimated 3%. This adjustment comes after analyzing the recent shipment figures from major notebook manufacturers in Taiwan.
According to Vinh, December’s laptop shipments totaled 13.3 million units, falling short of his initial estimate of 14 million units. He attributes this underperformance to a weaker-than-anticipated PC market recovery. It’s important to note that laptops make up the majority of PC sales as compared to desktop computers.
Vinh expressed concern over the lower December shipments and revised full-year outlook, emphasizing the negative impact these factors can have on PC-focused companies.
This latest development casts doubt on the sustainability of last summer’s surge in PC sales, which was largely driven by retailers and computer sellers replenishing their inventories. A significant and enduring recovery in the PC market may take longer than expected.
It’s worth mentioning that Taiwanese original design manufacturers (ODMs) account for over 90% of global laptop PC production. These ODMs manufacture PCs for major brands like Dell, Lenovo, and HP.
While the laptop shipment data paints a less optimistic picture for PC demand, it’s not the sole indicator. In late November, Dell Technologies reported underwhelming financial results for its most recent quarter, noting a decline in PC demand over the prior two months. Dell’s Chief Operating Officer, Jeff Clarke, acknowledged a strong demand for AI servers but admitted that their previous optimism for a rebound in the traditional PC market was misplaced.
To summarize, the future of AI PC demand faces some challenges, as evidenced by the lower-than-expected laptop shipments and revised growth forecasts. The sustainability of the PC market recovery remains uncertain, although there is continued demand for AI servers. Major PC manufacturers and sellers will need to navigate these shifting dynamics to stay competitive.