In 2024, the beleaguered Chinese PC market is expected to see some relief, but challenges persist.

Research institution Canalys has released the 2023 statistics for the Chinese PC market, along with future forecasts. Thanks to the replacement demand in the commercial market, the Chinese PC market (desktops, notebooks) shipped 41.2 million units in 2023, a year-on-year decrease of 17%; it is expected to grow by 3% in 2024 and further expand in 2025, reaching 10%.

In the fourth quarter of 2023, the Chinese PC market shipped 11.3 million units, a year-on-year decrease of 9%. Among them, desktop shipments fell by 13% year-on-year to 3.3 million units, and notebook shipments fell by 7% year-on-year to 8.1 million units. In the segmented market, the consumer market shipped 23.39 million units in 2023, the commercial market shipped 17.21 million units, and the education sector shipped 640,000 units.

In the tablet sector, the fourth quarter of 2023 saw a decline of 3% to 8.4 million units, with a full-year shipment of 28.3 million units. It is anticipated that competition in this category will intensify in 2024, with a growth of 4% expected in both 2024 and 2025. In the segmented market, consumer tablets shipped 23.755 million units in 2023, the commercial market shipped 3.731 million units, and the education sector shipped 836,000 units.

In terms of brands, in the 2023 Chinese PC market, Lenovo maintained its leading position with a market share of 38%, shipping 15.536 million units; HP ranked second with shipments of 4.309 million units, holding a market share of 10%; Huawei ranked third with shipments of 3.986 million units, also holding a market share of 10%. Dell and Asus ranked fourth and fifth, respectively.

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In the 2023 Chinese tablet market, Apple led with a 32% share, shipping 8.995 million units; Huawei was second with shipments of 6.46 million units, holding a 23% share; Xiaomi was third with shipments of 3.267 million units, holding a 12% share.Canalys analysts have indicated that the beleaguered Chinese PC market is expected to see some relief by 2024, yet challenges persist. Artificial Intelligence (AI) is poised to bring significant opportunities to the PC industry.

The latest forecasts from Canalys predict that global AI PC shipments are estimated to account for 18% of the total PC shipments in 2024, reaching 48 million units; by 2025, global AI PC shipments are expected to represent 40% of the total PC shipments, surpassing 100 million units; and by 2028, global AI PC shipments will hit 205 million units. The compound annual growth rate (CAGR) between 2024 and 2028 is projected to be 44%. The year 2024 will mark a significant turning point from traditional PCs to AI PCs.

These PCs integrate specialized AI accelerators such as Neural Processing Units (NPUs), unleashing new functionalities in productivity, personalization, and energy efficiency, disrupting the PC market and bringing substantial value gains for vendors and their partners.

Canalys Chief Analyst Ishan Dutt stated: "The widespread application of AI acceleration chips in personal computing will bring about a transformation, with over 150 million AI-capable PCs shipped by the end of 2025."

"Computers with specialized on-device AI capabilities will offer new and improved user experiences, driving productivity enhancement and large-scale personalized devices, while providing better energy efficiency, stronger security, and reducing costs associated with running AI workloads. This emerging category of PCs opens up new frontiers for software developers and hardware suppliers to innovate and offer compelling use cases for consumers, businesses, and educational scenarios."

The rapid proliferation of AI-enabled PCs will drive a moderate increase in the broader PC market TAM value. Canalys Analyst Kieren Jessop said: "The enhanced features of this new category will create momentum for premiumization, especially in the commercial sector."

"In the short term, Canalys anticipates that PCs with AI capabilities will command a price premium of 10% to 15% compared to similar-spec PCs without an integrated NPU. As adoption soars, by the end of 2025, over half of PCs priced at $800 and above will feature AI capabilities, and by 2028, this proportion will increase to over 80%. Consequently, PC shipments in this price range will account for more than half of the market share within just four years. This will help increase the total value of personal computer shipments from $225 billion in 2024 to over $270 billion by 2028."The accelerated penetration of AI technology can inject a strong stimulant into the PC industry and create new market increments. Dormant PC manufacturers are all planning to release AI PC products intensively in 2024. The industry generally believes that the emergence of AI PCs will trigger a wave of PC replacements, breaking through the existing growth constraints, and is expected to superimpose natural replacement demand, once again awakening the PC consumer market.

Qunji Consulting, Huachuang Securities, and other institutions all predict that 2024 will see a trend of large-scale shipments of AI PCs, and the shipment volume of related products will maintain rapid growth in 2025-2026. Specifically, in the Chinese PC market, according to IDC report data, the AI PC penetration rate in the Chinese PC market was about 8.1% in 2023, and it is expected to quickly increase to 54.7% in 2024. In the next few years, the proportion of AI PCs in new machine assembly will rapidly climb, and it is expected to reach 85% in 2027, becoming the mainstream model in the PC market. In terms of price, in the next five years in the consumer market for individuals and families, the average selling price of AI laptops will be in the range of 5500-6500 yuan, and the average price of AI desktop computers will be about 4000 yuan. It is expected that after 2024, demand growth and performance improvement will drive the average selling price of AI PCs to continue to rise.

Huatai Research provides a more refined expectation, comparing the smartphone market from 2002 to 2007 and 2010 to 2015 to measure the AI PC market. In 2028, under the medium and optimistic scenarios, the global AI PC shipment volume is expected to reach 36 million and 166 million units, respectively.

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