Upgrade cycles to boost global sales of AI-enabled PCs: Lenovo

Lenovo expects increased demand for AI-powered PCs as enterprises aim to enhance productivity with new technology while upgrading outdated hardware and software, according to Amar Babu, the company’s Asia-Pacific president.

“The technology itself is a key driver,” Babu said, noting that AI enables a personalized user experience that, once adopted, will lead to significant productivity gains and foster greater innovation and creativity.

Babu further highlighted the upcoming end of support for Windows 10, which will necessitate a migration to Windows 11 for enterprises and commercial users, further driving demand for new PCs.

Additionally, the anticipated PC refresh cycle, driven by the surge in purchases during the COVID-19 pandemic, is expected to create a significant replacement demand over the next two to three years.

Lenovo believes that a combination of these factors, along with the availability of advanced technology at competitive prices, will fuel market growth, potentially leading to over 50% of PCs sold globally being AI-enabled by 2027.

An IDC report released earlier this year supports this view, predicting that AI-enabled PCs could capture nearly 60% of the global PC market by 2027, indicating a major shift in the industry. Gartner predicts that by the end of 2026, 100% of enterprise PC purchases will be AI PCs, which are computers that include a neural processing unit (NPU) enabling on-computer AI operations.

However, as the industry increasingly adopts AI and seeks to diversify user experiences, brands are under pressure to collaborate and offer unique value propositions, particularly in the enterprise segment.

Lenovo’s efforts to differentiate

Lenovo has aimed to strengthen its position in the AI-powered computing market through partnerships focused on enhancing the capabilities of its AI PCs, next-generation AI PCs, and AI-ready workstations.

In collaboration with Intel, Lenovo was among the first to launch AI-enabled PCs featuring Intel Core Ultra processors, which made their debut at CES earlier this year, the company said.

At Computex 2024, Lenovo expanded its AI portfolio with laptops powered by AMD’s 3rd Gen Ryzen AI processors, targeting a broad spectrum of users, from consumers to small and medium-sized businesses.

Lenovo also partnered with Qualcomm and Microsoft to introduce the first Copilot+ PCs powered by Snapdragon X Elite processors. The Lenovo Yoga Slim 7x and ThinkPad T14s Gen 6, available since last quarter, offer enhanced personalization and AI-driven computing power, featuring Windows 11 and Copilot+ functionality.

Lenovo’s approach, as outlined by Babu, centers on enhancing the user experience by enabling its PCs to learn, adapt, and leverage data stored on the device. The strategy also emphasizes the importance of a hybrid AI model that operates both in the cloud and on the device.

“How can we provide a tech solution that allows for a comprehensive solution, enhances user experience by optimizing AI agents driven by different software partners, and provides the right platform, including the creation of our own foundational models as we develop throughout the product lifecycle?” Babu said. “That’s how we are approaching this whole AI PC game.”

The role of AI agents

The use of third-party AI solutions has become commonplace in the industry. Lenovo plans to follow this trend by developing its own AI agents, either through integration with platforms like Microsoft Copilot or through proprietary solutions tailored to specific industry needs.

In China, Lenovo has developed an LLM-powered personal AI agent in collaboration with a local cloud provider. For the global market, the company plans to integrate Copilot with its own AI agent to deliver tailored experiences and added value.

“We are working on a tool for creators that will allow them to leverage AI much more effectively,” Babu said. He added that the company is also developing platforms and stacks for developers to further enhance AI capabilities.

Lenovo believes this approach will set its user experience apart, ensuring that even with similar hardware specifications, the overall experience will be “very, very different” and comprehensive, thanks to its collaborations with multiple partners.

Babu believes that this strategy of combining in-house AI solutions with partnerships positions Lenovo to offer enterprises a more integrated and customized AI-powered PC experience, potentially giving it an advantage over competitors that rely solely on third-party integrations.

Leveraging the inevitability of AI

As AI technology continues to gain momentum, enterprises may increasingly require AI-enabled PCs to remain competitive.

“If your competitor is adopting this technology and you’re not, it could pose a challenge,” Babu said. “To stay competitive, integrating some of these AI capabilities may become necessary.”

Lenovo added it aims to help its enterprise clients maintain their competitive edge by providing a distinctive AI-powered PC experience backed by a comprehensive AI technology stack.