Despite price reductions, Copilot+ PCs still face challenges in communicating their value proposition to users. Analysts predict that adoption rates will increase in 2025 as awareness grows and price points become more diverse.
Microsoft and its network of PC manufacturers significantly reduced the price of Copilot+ PCs sold in Europe during the fourth quarter of 2024, according to market intelligence firm Context. The average distributor sale price for these AI-powered laptops dropped by approximately 10 percent in November compared to October.
While these price reductions helped generate some interest in the market, Context Senior Analyst Marie-Christine Pygott emphasized that the value proposition of these devices needs to be more effectively communicated to users. Context reports that European PC sales experienced modest growth leading up to Christmas, with AI-capable systems falling short of earlier expectations. Revenue across laptops, desktops, and tablets rose steadily during the final quarter of 2024, culminating in December European PC sales displaying revenues 7 percent higher than the previous year. The adoption rate of AI-capable laptops climbed to 32 percent during the quarter, up from 22 percent observed in Q3. Some predictions had anticipated AI-powered computers to constitute more than 40 percent of the market by 2025.The share of Copilot+ PCs within this segment of AI-capable laptops increased from 3 percent to 5 percent over the same period. Context aligns with Intel's definition of an AI-capable PC as one equipped with a processor featuring a built-in neural processing unit (NPU) to expedite certain AI operations. Pygott acknowledged that the market for next-generation AI PCs or Copilot+ PCs is still in its early stages, with adoption rates lagging behind initial projections. She noted that vendors are positioning AI PCs at a premium, and businesses are eager to transition to AI-powered systems but are awaiting a robust AI platform that offers future-proofing. The emergence of Copilot+ PCs and Recall further complicates the landscape. Despite the modest growth observed in Europe, the US market is also grappling with concerns that are dampening demand. This presents a challenge for Microsoft, which is actively promoting Copilot+ PCs as a success story. Having invested billions in AI development, Microsoft is collaborating with a network of software vendors to create applications that will leverage the NPU circuitry, aiming to persuade buyers. Pygott anticipates that adoption of 'pure' AI PCs will increase as availability expands and next-generation products are introduced. However, she cautioned that Copilot+ PCs present a distinct scenario. 'These are currently positioned in the premium price range, but their added value is not always evident to users. We believe this will change as users gain a clearer understanding of their capabilities and how AI will transform their PC usage experience, but it will require time,' she stated. Regarding the leading AI PC brands, Pygott indicated that Apple's systems based on its 'M' chips dominate the European and UK markets, while vendors such as Lenovo and HP have recently witnessed significant market share gains. Microsoft's Surface remains the top-performing product among Copilot+ PCs.
AI Pcs Copilot+ Pcs Microsoft European Market Adoption Rates Value Proposition Neural Processing Unit (NPU) Price Reductions
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