Microsoft and OEMs cut prices of CoPilot+ PCs in Europe during Q4, analyst stats confirm

Microsoft and its close circle of OEMs slashed the price of Copilot+ PCs being sold into Europe in Q4, an analyst confirmed to The Register, yet it still didn't make the impact hoped.

The average distributor sale price for Copilot+ laptops dropped by about 10 percent in November compared to October, according to market intelligence biz Context.

"While price reductions helped stimulate some interest in Q4, the value proposition of these devices still needs to be communicated more effectively to users," Context Senior Analyst Marie-Christine Pygott told The Reg. "As the concept matures, awareness grows, and a greater range of price points is being addressed, we expect adoption rates to increase in 2025."

This chimes with warnings from Gartner last year that buyers were being discouraged by the premium price tags carried by AI PCs and a lack of any real killer applications that make use of the hardware.

According to Context, European PC sales in general showed modest growth in the run up to Christmas, with AI-capable systems still below earlier expectations.

Revenue across laptops, desktops, and tablets trended upward in the final quarter of 2024, culminating in European PC sales for December showing revenues 7 percent higher than last year.

The adoption rate of AI-capable laptops rose to 32 percent during the quarter, up from the 22 percent observed during Q3. Some predictions had estimated that AI boxes would make up more than 40 percent of the market by 2025.

The share of Copilot+ PCs within this AI-capable segment increased from just 3 percent to 5 percent over the same period.

Context shares Intel's definition of an AI-capable PC as one featuring a processor with a built-in neural processing unit (NPU) to accelerate certain AI operations.

Copilot+ PC is Microsoft's branding and specifies systems with an NPU that performs at 40 TOPS or more, where TOPS is one measurement of AI performance.

"It is early days for the next-generation AI PCs or Copilot+ PCs, and adoption rates are still trailing initial projections," said Pygott.

"Vendors are pushing AI PCs with a premium. Businesses want to move to AI PCs but are waiting for an AI platform that will provide the most future-proofing. CoPilot+ PCs and Recall are further confusing the matter," Gartner research director Ranjit Atwal told us in November.

"Something will have to give in 2025, and I think it's AI pricing."

And while Europe is showing only modest growth, the US is also beset by concerns that are placing a chill on demand. In this case it is the prospect of tariffs imposed by the incoming President-elect Trump on technology made in China. This could bump up the price of a laptop for American buyers by 68 percent, according to recent reports.

This will be bad news for Microsoft, which is pushing hard for AI PCs - sorry, Copilot+ PCs - to be a success, having pumped billions into AI development, as we reported last year.

Microsoft is said to be working with a network of software vendors to build applications that will use the NPU circuitry, in an attempt to sway buyers.

Looking ahead, Pygott forecast that for "pure" AI PCs, adoption will go up as availability increases and next-generation products are rolled out, but she warned that Copilot+ PCs are "a bit different."

"These are currently in the premium price range, but their value add is not always clear to users. We believe this will change as it becomes clearer to users what these PCs can do, and how the way they use a PC will change with AI, but it will take some time."

When it comes to which AI PCs are leading the way, Pygott said that Apple's systems based on its "M" chips lead in Europe and the UK, while vendors such as Lenovo and HP have recently gained a lot of share, and Microsoft's Surface is the top product among Copilot+ PCs.

She cautioned that this is based on distributor sell-through data rather than retail sales. ®

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