The Future of Laptops: AI Dominance by 2027

The landscape of personal computing is undergoing a significant transformation. A recent report suggests that by 2027, three out of every four laptop PCs sold will be AI laptop PCs. This shift is largely attributed to the boom in generative AI (GenAI), which is reshaping the PC industry.

The Rise of AI Laptops

The global PC market has seen its share of ups and downs, with inventory correction and demand weakness being normalized, largely factoring in the impacts from COVID-19. However, the advent of AI is set to revive the replacement demand in the laptop PC market. Counterpoint estimates that almost half a billion AI laptop PCs will be sold during the 2023-2027 period.

AI laptops are categorized into three types based on their computational performance, use cases, and efficiency:

AI Basic Laptop: These laptops can perform basic AI tasks but not completely GenAI tasks.
AI-Advanced Laptop: These laptops are equipped with enough TOPS (tera operations per second) powered by NPU (neural processing unit) or GPU (graphics processing unit) to perform advanced GenAI tasks.
AI-Capable Laptop: These laptops are expected to perform the most advanced GenAI tasks.

The Market Forecast

The penetration of AI-advanced laptops, which will form a majority of the AI laptop PC segment, is expected to pick up in the next two years. This is due to chip vendors scaling the GenAI capability to mainstream tiers. GenAI is set to become a de facto and must-have capability in the PC segment.

While the overall laptop PC market is expected to register a CAGR of ~3% during 2023-2027, the AI laptop PC segment is bound to grow at a staggering 59% CAGR. This growth is driven by the advanced semiconductor content from compute to memory, which will drive a positive ASP (average selling price) growth associated with newer GenAI capabilities.

The Role of Chip Vendors

Chip vendors play a crucial role in driving GenAI in PCs. The first wave of AI PCs will gradually come up with three major CPU platforms - Intel Meteor Lake, AMD Hawk Point, and Qualcomm Snapdragon X Elite series. These vendors are also preparing for next-generation solutions for AI laptop PCs rolling out later this year, which will accelerate the adoption of AI PCs at multiple price points.

In conclusion, the future of laptops is bright and AI-driven. With the proliferation of GenAI use cases at the edge or in the cloud or in a hybrid way in the next few years, AI laptops are set to dominate the market by 2027.