Trump China tariffs to 'overshadow' the 'progress' of AI PCs

The "progress" of AI PCs is being "overshadowed" by enterprises concerned about the state of the economy and US President-elect Trump's tariff threats for kit made in China, according to market watcher and number cruncher IDC.

Shipments edged up 1.8 percent to 68.9 million units in calendar Q4, with Lenovo, up 4.8 percent, outpacing the average to consolidate market share and account for almost one in every four computers bought by distributors globally.

Government subsidies in China helped to boost consumer sales locally, and end-of-year promotions tempted shoppers in Europe and the US too. Businesses continued to gradually sign off on hardware upgrades before Windows 10 support ends in October 2025, albeit not at the rate vendors expected.

This was a better finish to the year for the PC industry, which grew by just 1 percent over the 12 months to 262.7 million units.

Yet several tailwinds and headwinds - IDC's words - make for a "challenging" outlook for the current year, and the Windows refresh along with hype around AI PCs are countered by the new and increased 60 percent tax that Trump is promising on electronic goods made in the Middle Kingdom.

The prospect of this tariff has "elevated the level of concern" from manufacturers, says IDC. According to Statista, China produces tens of millions of computers every month, accounting for 31.19 million in July 2024 alone.

"The overall macroeconomic concerns seem to be overshadowing some of the progress and excitement around AI PCs," admitted Ryan Reith, group veep for IDC's Worldwide Device Trackers. "However, we maintain the view that the impact that on-device AI will have on the industry will be positive, even if the inflection point is delayed."

"When the industry is trying to push new AI PCs that come with higher cost at a time when use cases are still being vetted and budgets are tight, that is clearly going to be a challenge. But on-device AI for PCs is inevitable. Therefore, right now it is about suppliers trying to be patient as their customers are dealing with headwinds unrelated to these technology advancements."

It seemingly is going to be impossible to avoid an AI PC by 2027, although it sounds as though many customers will do a good job of it in 2025. Gartner estimated in September that AI PCs would account for 114 million units this year, but by November, the analyst appeared to reconsider that forecast as the inflated cost of these boxes was the sticking point.

And this is before the Trump tax was factored into the equation. Initial estimates suggested US PC prices could jump 46 percent in 2025 due to the import tax, later revised to 68 percent this week in another study.

Either way, this is not how PC makers saw their 2025 evolving when they were rubbing their hands together at the prospect of 5-10 percent higher margin sales of the NPU-based boxes. ®