Can AI shorten PC replacement cycles? Dell seems to think so

Might be wishful thinking from finance exec following two-year computer sector recession

AI could be the mechanism to shorten notebook replacement cycles, according to the chief financial officer at Dell.

Talking at the Morgan Stanley Technology, Media and Telecom 2024 conference last week, Dell exec Yvonne McGill pointed out that the PC industry has just emerged from eight straight quarters of shrinking shipments.

"We've been in the longest digestion cycle … in the history of PCs, and so we know it's back-to-back years of double-digit decline, pretty amazing, never seen before results. But it's time for a refresh, right?" she asked the interviewer and the audience.

The drivers for that refresh – which Dell, HP, and others are banking on beginning later this year – include Windows 10 going end-of-life in 19 months and on-device generative AI, though McGill admitted "that's less of a driver right now."

Cutting through some of the hype around the emerging class of client devices, Morgan Stanley's interviewer mused: "When should we think about the real use cases to drive adoption [of AI PCs]? There's some skepticism."

The Dell exec responded by trying to define an AI PC as one with an neural processing unit (NPU) or a specialized GPU. Likewise, Intel said it thinks AI PCs are those with the company's latest CPUs.

"But how do you really take advantage of it? What capabilities do you need? I think that's really what everyone is talking about."

"I expect a lot more capabilities," said McGill. "You're going to want to have those capabilities embedded in your device because when the technology is delivered, you don't want to have to refresh your PC again, right?

"And so if you think of a notebook, I'm going to give a three-year ... refresh cycle. I know we're elongated right now, but I'm going to plant the seed that's a three-year refresh cycle."

Gartner estimates that the average life of a business notebook is four years, and "longer for consumers," director analyst Mikako Kitagawa told The Register.

"We do not predict the refresh cycle," she said. "But I can tell you AI PCs won't significantly impact PC market growth in the next 2-3 years until more AI-powered applications run on devices, not in the cloud."

HP boss Enrique Lores also expects AI PCs will trigger "market expansion and refresh." First, however, "we need to deliver the hardware to be able to support these new models, and we are working on that with the key silicon providers.

"Second, we need to make sure that the applications support that and we are working with all the keys of our companies again to make sure they understand the new capabilities and that they build them into their applications.

"And third is training both in terms of our customers, but also in terms of the sales teams, either HP or the resellers that will be selling that. And we are working on all fronts. Our projections continue to be that three years after launch, the penetration of AI PCs will be somewhere between 40 and 60 percent of the total sales that we will be making," he told the Morgan Stanley TMT conference earlier in March.

Directions on Microsoft recently pointed to the lack of standards for AI software or hardware.

"Microsoft and others are particularly silent on this point, even though lots of machines demonstrated at CES in January are promoting their NPUs. But an NPU from Qualcomm is not the same as one from Intel or AMD or Nvidia," said analyst Michael Cherry.

He said something like DirectX for AI is needed and a future version of the DirectML machine learning library could be a solution. As Reg readers know, DirectX is the API layer in Windows that standardized 3D graphics and audio across different hardware.

"Microsoft announced in early February a developer preview for DirectML 1.13.1, which supports Intel AI Boost NPUs. But until it is clear which vendors support APIs such as DirectML, or some other standard, there is a risk when buying an expensive NPU-enabled processor-based PC," said Cherry. ®

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