Laptop market scenery is no longer. Data show that global laptop shipments fell 16.5% in 2022, and did not stop falling into 2023, Q1 shipments fell by nearly 30%, including Lenovo, HP, Apple, including the highest shipments of several manufacturers were not spared, all double-digit decline.

At a time when all the horses are in the air, the major brands have to tell a new story.

On June 25, the Economic Times reported that Acer, HP, Asus and other brands have recently shown strong interest in building AI laptops and have started planning for related products. Previously, a third-party agency IDC also released a similar study, saying that AI is expected to drive double-digit growth in global notebook shipments in 2024.

For many laptop manufacturers who have stalled and slipped to the bottom, AI can be considered as another promising rebound point after gaming, and even imagine the space far beyond gaming.

Of course, there are both opportunities and challenges. Computer brands hope to seize the opportunity to change the trend, but can AI really make the industry turn around and go straight up? Acer, HP, ASUS and other brands can achieve the bend? Can the market pattern be reshuffled? And what new challenges will emerge?

01 The Lucky Laptop Market

The laptop market is a little luckier than the smartphone next door.

Around 2019, the consumer electronics market entered a winter period, led by smartphones and laptops, the sales of electronic products hit. Unlike the smartphone manufacturers have "high" marketing strategy, notebook manufacturers have adopted a relatively conservative response plan to clear inventory and tap the vertical game market.

Then, the "black swan" of the 2020 epidemic hit, and demand for home office and home entertainment exploded, making business and gaming notebooks the biggest winners in consumer electronics. The report shows that global notebook sales will rise by 19% to 268 million units in 2021, compared to the record year of 2020.

And, thanks to a higher premium for gaming series products, there are more marketing gimmicks compared to business and gaming notebooks. So in recent years, notebook manufacturers have had a lot of warmth in the midst of the winter.

However, as a durable consumer product, a large number of short-term shipments will also consume the future demand in advance.

Since the beginning of 2022, the head of the notebook makers have fallen into sales difficulties, Lenovo, HP and Dell three traditional computer manufacturers have seen a significant decline in shipments. Among them, HP plunged 27.8% compared to the same period in 2021, becoming the most significant drop in the head of one. It is worth mentioning that Apple has also been exposed to the news of M2 chip production reduction in the near future, so it can be presumed that the MacBook as the representative of the business book is also having a hard time.

The good thing is that ChatGPT brought the AI concept explosion, for the notebook industry a "timely rain".

The AIGC big model and application is bursting at the seams, driving the demand for computing power. In most of the Internet of Everything scenarios, cloud processing has long latency, high cost and involves data privacy, the introduction of edge AI arithmetic power is crucial. We believe that in the future, AI arithmetic will be flexibly allocated at the edge and the cloud with a hybrid AI architecture, taking into account hardware capacity, cost and other factors."

Hybrid AI refers to the joint processing of AI computing on the cloud and device side, with the advantage of instant perception and instant processing on the device side to fill the shortcomings of cloud-side AI in terms of latency and privacy, while also compensating for the shortcomings of end-side AI performance through the ultra-high arithmetic power on the cloud side.

And as an arithmetic terminal, notebooks can naturally be combined with AI. The industry has also started planning from different directions.

Acer Computer Chairman Chen Jun Sheng analyzed that AIGC (generative AI) will be more commonly used in various aspects such as productivity improvement and optimization, and these usage scenarios bring rigid demand for laptops.

However, Acer's founder, John Shih, has the opposite view, saying that if AI notebooks are to truly provide "new value", they will not rely on software applications, but on new AI-specific chips, software, and even new usage scenarios and experiences, which "could be a new direction for PC development. "The new AI notebooks are not based on software applications, but on new AI-specific chips, software, and even new scenarios and experiences.

In terms of specific product planning, Acer has already started cooperation with CPU manufacturers and expects to introduce AIGC or other AI applications into terminal devices, and related AI notebook solutions will be launched one after another in 2024 and 2025.

Asus, on the other hand, is more inclined to software-level innovation. Chairman Shih Chong-tong sees AI as a "re-breakthrough" in computer fundamentals and a core technology. He also cites Microsoft and Google as examples, and the current approach of the two companies is to introduce AI into their own software application ecosystem.

HP Computer CEO Enrique Lores also said he is currently developing AI-enabled PCs, saying he is currently working with all key software providers and chip suppliers to redesign the architecture of PCs.

It is clear that the industry and research institutions have not yet reached a specific consensus on the specific concept of "AI laptops". In other words, the "final interpretation" of AI notebooks is likely to be defined differently by different manufacturers over time.

In the opinion of "Technology New Knowledge", the huge business opportunities brought by AI are currently benefiting the upstream server market; while Acer, HP and other downstream products are difficult to directly graft AI capabilities to the notebook experience in the short term, and the expected positive impact will only begin to ferment after 2024 at the earliest.

02 New products can hardly shake the old pattern

The logic of AI driving the consolidation and upgrade of the entire PC industry is that the extensive demand for AI applications requires more powerful processors, higher capacity memory, and faster storage devices.

In order to meet the vacancies in various aspects such as arithmetic power and algorithms brought by AI, PC manufacturers will continue to increase investment in R&D and launch processors and graphics processing units optimized specifically for AI applications. The upgrade in demand will also enable the stock market of laptops to find new breakthroughs.

Product change is on the horizon, but it is important to note that in the notebook market, which is already extremely stable, running fast may not be the first.

From the bottom up, the development of AI notebooks is just two major directions, the software mosaic level and hardware transformation level.

Acer, HP, ASUS three claim to develop AI notebook business is also based on these two levels, and has found a good supplier, product launch also has a general plan. Although Lenovo and Dell two global notebook leader has not yet too much sound, but it does not mean that it will lag behind.

Lenovo has already started laying out AI servers at the beginning of the AIGC explosion, combining high-performance computing, graphics workloads and other functions required for AI with servers. The personal PC is essentially a small server with a lower configuration, which means Lenovo actually has some experience in AI pen drives.

At the software level, Lenovo's Lenovo AI Innovator Program, which covers almost every aspect of computer vision, audio recognition, prediction, security and virtual assistants for all industries, also provides the basis for its development of AI software ecology.

The core of the growth logic of the notebook market is to attract users through innovative experiences.

For example, Huawei's previous main cross-end experience led to a wave and a qualitative growth in Huawei's notebook business. But after the wave, the original innovation became the standard, Huawei notebook eventually failed to successfully shake the industry pattern. The same is true for the gaming book category, seeing that the market is rapidly advancing after the fire, it is difficult to say who has the first mover advantage.

The pen industry is very strong in the accumulation of precipitation, as long as the willingness to work, quickly make the industry's mainstream products is not difficult. The focus of competition in the market will still be on brand, channel and supply chain.

The manufacturer, the channel and the brand in decades of cooperation, has formed a community of interest, and similar "online integration" innovation has reached the end of the dividend, so it is difficult to have a new breakthrough in the short term.

It is worth mentioning that brands like Dell and other government and enterprise channels may be the first to usher in the rebound.

From the fourth quarter of 2020, the impact of the epidemic from small and medium-sized enterprises to purchase large single serious decline, the most obvious impact is Dell, the domestic market for many quarters in a row down. Now the domestic commercial market boom began to improve, future shipments are likely to return to the previous.

"The supply chain is the focus of future competition among the families, because unlike traditional laptops, AI laptops are required to combine AI with hardware or software before leaving the factory, which tests the ability to innovate in cooperation between manufacturers and supply chain vendors." An industry insider said to "Technology New Knowledge", "AI penlight will also change the traditional penlight hardware devices to a certain extent, such as adding new AIGC accessories, architecture redesign, etc. This may require manufacturers to contact more different supply chain companies, the first to take more AI direction of the supply chain companies, in order to be able to achieve certain advantages. "

But the traditional PC manufacturers, the biggest enemy of the AI era may not be those old rivals, but the Internet manufacturers represented by Huawei, Microsoft, Xiaomi, Google. The market share of these brands at the moment, although all in the Others, but in the ecology, AI, each have advantages, the future may bring no small impact.