The Resurgence of the PC Market: Driven by Windows 10 End of Life and AI Adoption
The global PC market has witnessed a significant turnaround in 2024, marked by a modest yet encouraging growth in shipments. This resurgence is largely attributed to the impending end of support for Windows 10 and the rising adoption of AI-capable PCs. Here, we delve into the latest developments, key facts and figures, expert reactions, and the broader implications of these trends.
Latest Developments and Timeline
PC Shipments Growth
Global PC shipments saw a notable increase in 2024, with a 3.8% year-over-year growth, reaching 255.5 million units according to Canalys, and a 1.3% increase to 245.3 million units as per IDC. This growth indicates a return to traditional seasonality for the PC market after a period of slower growth[3][5].
Q4 2024 Performance
The fourth quarter of 2024 was particularly strong, with PC shipments growing by 4.6% year-over-year, totaling 67.5 million PCs. This growth was driven by several factors, including strong Christmas sales, aggressive discounting by vendors and retailers, and the increased adoption of Buy Now, Pay Later schemes. These financial incentives made big-ticket items like PCs more accessible to consumers who have become increasingly price-sensitive[3][5].
Windows 10 End of Life
The official end-of-support date for Windows 10 is set for October 14, 2025. This milestone is a critical driver for the current PC shipment growth, as businesses and individuals prepare to upgrade their hardware to ensure continued support and security updates. Microsoft's announcement has been a clarion call for users to transition to Windows 11, given the stringent hardware requirements and the necessity of maintaining up-to-date security features[1][4][5].
Key Facts and Figures
- Total Shipments:
- Canalys reported 255.5 million PC shipments in 2024.
- IDC reported 245.3 million PC shipments in 2024. These numbers reflect a modest recovery from the weaker market conditions in 2023[3][5].
- Year-over-Year Growth:
- A 3.8% year-over-year growth as per Canalys.
- A 1.3% year-over-year growth as per IDC. These growth rates indicate a gradual but positive trend in the PC market[3][5].
- Q4 Shipments:
- 67.5 million PCs were shipped in the fourth quarter of 2024, a 4.6% growth from the previous year. This quarter saw heightened activity due to holiday season demand and end-of-year promotions[3].
- AI-Capable PCs:
- Shipments of AI-capable PCs are on the rise, with significant growth expected in 2025. These PCs, equipped with advanced technologies like Neural Processing Units (NPUs), are anticipated to surpass 100 million shipments in the coming year. AI-driven applications are becoming increasingly prevalent, driving demand for more powerful and efficient PCs[3][4].
- Windows 10 Devices:
- Approximately 240 million Windows 10 devices are expected to become obsolete by the time Microsoft ends support. This massive number of devices becoming e-waste is a significant concern, but many of these PCs could be recycled or refurbished if in good condition, mitigating some of the environmental impact[2].
Expert Reactions and Analysis
Canalys Analyst Kieren Jessop
"2024 was a year of modest recovery and a return to traditional seasonality for the PC market... Growth increased slightly in Q4, with shipments rising by 4.6% year on year, signaling a positive trend as we moved to within a year of the Windows 10 end-of-support date."[5]
Jessop's analysis highlights the importance of the Windows 10 end-of-life date in driving PC sales. The significant demand during the COVID-19 pandemic also played a role, as many business PC fleets are now due for a refresh.
Ross Rubin, Reticle Research
"Microsoft is getting increasingly aggressive in letting customers know that support is going to be ending, and they really need to upgrade to Windows 11... Given the relatively stringent requirements for that, the only way to do so is to purchase a new computer."[1]
Rubin's comments underscore the urgency felt by businesses and individuals to upgrade their hardware. The stringent requirements for Windows 11 mean that many older PCs are ineligible for the update, necessitating new purchases.
Jitesh Ubrani, IDC
"Beyond that, the US and some European countries also showed strong performance due to end-of-year sale promotions, as well as enterprises continuing on the path of upgrading hardware before the end of support for Windows 10."[3]
Ubrani's insights emphasize the role of regional factors, such as government subsidies in China and end-of-year promotions in the US and Europe, in driving PC sales.
Global or Local Impact
Global Market
The global PC market experienced growth driven by various factors, including the end of Windows 10 support, government subsidies in China, and end-of-year sale promotions in the US and Europe. This growth is a testament to the market's resilience and adaptability.
China
Government subsidies in China played a significant role in promoting spending on notebooks, contributing to better-than-expected performance within the consumer segment. Despite overall market challenges, China's consumer segment showed notable activity, particularly in the fourth quarter of 2024. However, the broader Asia Pacific region faced challenges, with low demand in China pulling down PC growth in the region[3].
US and Europe
Strong performance was observed in these regions due to end-of-year sale promotions and enterprise hardware upgrades ahead of the Windows 10 end-of-life date. Stable macroeconomic conditions in the US and healthy demand from the public sector further supported this growth. The use of Buy Now, Pay Later services also contributed to increased spending on big-ticket items like PCs[3].
Related Events or Context
COVID-19 Pandemic
Many PCs bought during the pandemic are now reaching the end of their useful lives, contributing to the need for replacements. This factor, combined with the end of Windows 10 support, has created a perfect storm driving PC sales. Businesses that accelerated their technology adoption during the pandemic are now on a cycle to refresh their hardware, aligning with the typical 3-4 year refresh cycle in developed markets[4].
AI Adoption
The introduction of AI-powered PCs is driving significant demand. AI PCs, such as those with Neural Processing Units (NPUs), are expected to become a major segment, with penetration projected to rise to 35% of the total PC market by 2025. This trend is likely to continue as AI-driven applications become more prevalent, enhancing security, battery life, memory, and processor speed. The launch of the first Copilot+ PCs powered by Snapdragon processors and Apple's AI strategy announcements further underscore the industry's transition towards AI-driven technologies[3][4].
Extended Security Updates
Microsoft is offering an Extended Security Updates program for Windows 10, but the high cost makes extending the life of Windows 10 PCs less appealing. Starting at $61 per device for the first year, increasing to $122 for the second year, and $244 for the third year, this program is not a viable long-term solution for many businesses. As a result, the need for hardware upgrades has been further accelerated[2].
Future Implications
Continued Growth
Commercial PC shipments are expected to continue outgrowing consumer shipments due to the large and aging installed hardware base and the impending end of Windows 10 support. This trend is anticipated to drive significant growth in the PC market throughout 2025. Businesses will continue to refresh their PCs to maintain compliance with the latest security updates and to leverage new features and technologies[1][4].
E-Waste Concerns
The end of Windows 10 support is expected to result in a significant amount of e-waste, with approximately 240 million PCs becoming obsolete. This could lead to substantial environmental consequences, including an estimated 1.06 billion pounds of e-waste, equivalent to the weight of 320,000 cars. However, many of these PCs could be recycled or refurbished if in good condition, mitigating some of the environmental impact. Embracing responsible recycling practices will be crucial in managing this e-waste effectively[2][4].
AI-Driven Demand
The adoption of AI-capable PCs is expected to drive significant demand, with shipments projected to surpass 100 million in 2025. This trend is likely to continue as AI-driven applications become more prevalent and businesses seek to leverage AI for enhanced security, battery life, memory, and processor speed. The integration of AI into PCs will also drive innovation in software and hardware, leading to more efficient and powerful computing solutions[3][4].
Market Competition
The introduction of AI PCs is intensifying competition among major PC vendors like Lenovo, HP, Dell, Apple, and Asus. These companies are racing to offer faster processing speeds and advanced AI capabilities, which will likely lead to innovative products and services in the coming years. Lenovo maintained its position as the market leader in the global PC market, shipping 14.7 million units in Q2 2024, while Asus experienced the highest growth in Q2 2024 with a 17% annual increase, thanks to the success of its gaming PCs[3].
Vendor Performance
- Lenovo: Maintained its position as the market leader, shipping 14.7 million units in Q2 2024, reflecting a 4% annual growth[3].
- HP: Secured the second spot, shipping 13.7 million units, but showed a modest decline in some regions[3].
- Dell: Ranked third but reported an annual decline, primarily due to reduced shipments in the US market[3].
- Apple: Secured the fourth position, shipping 5.5 million units and capturing a 9% market share, marking a 6% increase compared to the same period last year[3].
- Asus: Overtaking Acer, thanks to the success of its gaming PCs, Asus experienced the highest growth in Q2 2024 with a 17% annual increase, shipping 4.5 million units[3].
Conclusion
The PC market's resurgence in 2024 is a multifaceted phenomenon driven by the end of Windows 10 support, the rise of AI-capable PCs, and various regional factors. As we approach the October 2025 deadline for Windows 10 support, businesses and individuals are increasingly looking to upgrade their hardware to ensure continued security and performance.
The growth in PC shipments, particularly in the fourth quarter of 2024, sets a positive tone for the market in 2025. However, this growth also raises important questions about e-waste management and the environmental impact of such large-scale hardware replacements.
As AI adoption continues to drive demand for more powerful and efficient PCs, the market is poised for significant innovation and competition. Major PC vendors are positioning themselves to capitalize on this trend, offering advanced AI capabilities and enhanced security features.
In conclusion, the PC market's future looks promising, driven by technological advancements and the imperative to upgrade. As we navigate this transition, it is crucial to address the environmental and economic implications of this shift, ensuring a sustainable and resilient PC market for years to come.
Addressing E-Waste and Sustainability
The impending surge in e-waste due to the obsolescence of Windows 10 PCs highlights the need for robust recycling and refurbishment programs. Companies and governments must collaborate to establish efficient recycling infrastructure and encourage responsible disposal practices. This includes promoting the reuse of functional components, recycling of materials, and proper disposal of hazardous waste.
Economic Implications
The refresh cycle driven by the end of Windows 10 support and AI adoption will have broader economic implications. It will create new opportunities for PC manufacturers, software developers, and service providers. However, it also poses challenges for businesses and consumers in terms of budgeting for new hardware and ensuring a smooth transition.
Technological Advancements
The integration of AI into PCs is not just about processing power; it also involves advanced security features, improved battery life, and enhanced user experiences. As AI technologies mature, we can expect more sophisticated applications across various industries, from healthcare and finance to education and entertainment.
In summary, the PC market is at the cusp of a significant transformation, driven by both the necessity of upgrading from Windows 10 and the exciting possibilities offered by AI-capable PCs. As we move forward, it is essential to balance technological progress with sustainability and responsible management of e-waste, ensuring that the benefits of this growth are shared equitably and sustainably.
