There will be Surge in AI PC and Smartphone Markets: Gartner Forecasts

There will be a significant surge in worldwide shipments of Artificial Intelligence (AI) powered PCs and Generative AI (GenAI) smartphones by the end of 2024, Gartner said. The report suggests that these shipments will soar to 295 million units, a stark increase from 29 million units recorded in 2023.
AI smartphone and PC market sizeRanjit Atwal, Senior Director Analyst at Gartner, emphasized the rapid adoption of on-device GenAI capabilities and AI processors, foreseeing them becoming standard requirements for technology vendors. Atwal remarked, “This ubiquity will pose challenges for vendors in differentiating themselves from competitors, making it harder to create unique selling points and drive increased revenues.”

According to Gartner’s estimates, by the conclusion of 2024, approximately 240 million GenAI smartphones and 54.5 million AI PCs are expected to be shipped, accounting for 22 percent of basic and premium smartphones and 22 percent of all PCs worldwide.

The integration of AI into PCs, however, is not anticipated to lead to significant increases in end-user spending beyond expected price rises. Despite this, business device buyers will demand compelling reasons to invest, and it will take time for software providers to fully harness the power of on-device AI and demonstrate its enhanced benefits.

In terms of overall PC shipments, Gartner predicts a total of 250.4 million units in 2024, representing a 3.5 percent increase from 2023. The PC market, which experienced 8 consecutive quarters of decline, saw a return to growth in the fourth quarter of 2023. The integration of on-device AI is expected to rejuvenate PC marketing throughout 2024 and help sustain existing replacement cycles, mitigating some of the negative impacts of a disruptive socioeconomic environment.

Similarly, GenAI smartphones are not expected to drive significant demand until 2027. Atwal notes that while enhancements to smartphones, such as improved camera and voice integration, are anticipated by users, they may not necessarily translate into groundbreaking functionality. Users are unlikely to pay a premium for GenAI smartphones without the availability of truly groundbreaking applications.

Looking ahead, Gartner foresees transformative shifts in user experience driven by advancements in smaller versions of Large Language Models (LLMs) tailored specifically for smartphones. These advancements are expected to make smartphones even more intuitive companions capable of comprehending and responding to human language and visual cues, thus elevating the overall user experience.

In 2024, worldwide smartphone shipments are projected to grow by 4.2 percent, totaling 1.2 billion units year over year. This growth follows the smartphone market’s first quarter of growth in the fourth quarter of 2023 after 9 consecutive quarters of decline. Atwal advises caution in interpreting this growth as a full-fledged recovery, suggesting instead that it reflects a stabilization at lower unit levels compared to 2022, with nearly 60 million units lower.

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