A new cycle change is about to arrive in the personal computer (PC) market, this time on the rise and which a priori would more than compensate for the decline suffered in 2023 (year-on-year drop of 13.9%, according to the consulting firm IDC, or 14.8%, according to Gartner). In fact, sales have improved quarter after quarter and will supposedly leave a positive balance in the current one, according to published analyses. “This time we see elements to be optimistic,” says Enrique Lores, executive director of the multinational HP, which last year shipped 21.3% of the PCs sold in the world.
“Perhaps we were wrong to think that at the end of the pandemic the expansive current would be long. From those months, we all remember how well our societies accommodated the change in the work model, generating a demand that would last a year and a half or two years, but that was not a natural phenomenon, which is why it declined. But now it is escalating again.” Promemory: in 2021, 349 million units were sold worldwide; Last year they did not exceed 258 million. In 2024, growth of 8% is predicted. The main component of the change in bias will be the incorporation of artificial intelligence, today on everyone's lips: it should accelerate the establishment of hybrid work, in which technology is a condition for flexibility. “We are convinced that AI is going to cause sustained demand for our products,” anticipates Lores.
The installed base will normalize – during the pandemic everyone used what was available, not always appropriate – gradually, when the so-called AI-PCs go on sale, a new generation of laptops equipped to work with artificial intelligence (AI, in the English acronym). “According to our estimate, in the next three years, AI-PCs will represent between 40% and 60% of the total in use.”
This trend represents two advantages for any seller, explains Lores: “The value that a PC provides will increase and in theory the margin should also increase. As users perceive that value – he predicts – they will prefer a PC with those features and will naturally change their current devices for others that will greatly improve their user experience.” There will be other consequences: the integration of AI will complicate the catalog of brands, which will have to simplify traditional models while adding features to the new ones. There will be PC with and PC without.
The subscription model, which is already common in other products – and which HP uses with great success in replacing ink in its printers – will be extended to PCs and their accessories in 2024: “Investors like the subscription model. HP subscription, although it still generates a smaller part of the company's $63 billion bill. And when we talk about subscription, we are not just thinking about recurring revenue, that too, but that customer retention will be deeper. We will begin to see it with the news of the first quarter. When we can solve problems for companies that have not been resolved today, we will be able to offer them everything they need under subscription.”
In the last three years, HP has made two key acquisitions for this change in cycle. One –Poly– completes its catalog with videoconferencing systems integrated with the software that the brand uses on its PCs and printers. The other –HyperX– provides its lines of peripherals, mainly for games. They are two of the five opportunities that Lores calls adjacent. Together, the five will contribute 10% annually of new income, with higher margins than usual.
