It’s been a long time coming but now it might just have arrived: a reboot for global PC sales and good times ahead for the leading PC retailers around the Asia-Pacific, both online and offline. According to a report authored by analysts at Citi Research, expectations in 2023 that a turnaround was imminent are now being fulfilled and they are likely to be sustained for some time as new models are rolled out.Summarising industry projections from various sources, Citi sees “low to mid-single digit global PC market growth by value in 2024. In 2025, growth is expected to accelerate to approximately 8-10 per cent.” This acceleration is due to the phased introduction of new products throughout 2023 and 2024.The forecast growth is great news for long-suffering computer retailers, whose lean spell has lasted more than a decade. It was interrupted briefly by two years of Covid with its shift to work and study from home, resulting in a short-term spike in sales. Apart from 2020-21 though, it’s been a long drought.That drought appeared to break already in the first quarter: according to PC market research firm Canalys, shipments of desktops and notebooks were up 3.2 per cent year-on-year in the first quarter, to 57.2 million units, of which 45.1 million were notebooks. (Data for shipments is available only with a significant lag, but the trend in the first quarter is likely to have been sustained.)A number of factors driving salesAccording to the Citi report, the rebound in sales is and will be driven to a large extent by AI-enabled PCs, but there are other factors at play also. Computers have a replacement cycle and we are now in the middle of one. Global sales, according to data cited by Statista, peaked at just over 365 million in 2011, and subsequently declined for the next seven consecutive years, bottoming out at 260 million in 2018. Covid gave sales a big kick-along and shipments rose again to 342 million in 2021, but by 2023 had fallen off a cliff to 242 million, a level not seen for 17 years. That’s where the current replacement cycle kicks in: a rough rule of thumb is that consumers replace their notebook computers every three or so years, so a big chunk of the roughly 650 million people who purchased computers in 2020-21 are now looking to replace them.There is another factor as well: if you are still a Windows 10 user you will have received frequent nudges from Microsoft to upgrade to Windows 11. Support for Windows 10 will cease in 2025 so if you want security updates for a Windows 10 operating system you’ll be out of luck. Canalys is particularly bullish about the opportunity presented by the Windows 11 transition. “The market is set to go from strength to strength in the coming quarters as customers prioritise upgrades in preparation for a large-scale transition to Windows 11. The current PC installed base is larger and older than ever, presenting a huge opportunity for OEMs [original equipment manufacturers] and their partners.”AI is the big driverIt’s AI though that industry analysts see as the biggest driver behind the resurgence of PC sales.AI PCs will not only attract consumers with their features and generate higher unit sales but they will also be sold at a higher price than the generation of PCs they are replacing. Citi cites industry sources that predict the average PC sale price will rise by somewhere between five and 10 percent.All of the top PC brands have already rolled out AI-enabled models. According to data from Statista, the top PC brands globally are, in order of shipments, Lenovo (25 per cent market share last year), HP (22 per cent), Dell (17 per cent), Apple (9 per cent, Asus (7 per cent) and Acer (7 per cent). Apple, HP and Dell will be wheeling out even more new models later this year that will further refresh the market so retailers that sell PCs should see computer sales lift.What exactly is an AI PC?An AI PC can run various AI applications like Apple Intelligence and Microsoft’s Copilot+ locally on the PC itself, rather than having to access the cloud as is the case with AI apps on a non-AI-enabled computer. Moreover, they accomplish this without compromising battery life and other performance characteristics. Indeed, it should improve privacy and security, and also save on bandwidth by avoiding the round-trip journey from PC to cloud and back. To be more stingy with power consumption, the hardware includes a special Processing Unit — this is usually a Neural Processing Unit, or NPU — that runs the AI applications with enhanced power efficiency. Smartphone sales recovering tooAlthough the recovery of worldwide computer sales is attributable to the confluence of several factors, it underscores again how a significant step-up in technological innovation — in this case AI — can result in the sharp and sustainable turnaround of a stagnant industry segment. Interestingly, it isn’t just computer shipments that have been ailing since Covid: worldwide shipments of smartphones have also been seriously tanking since 2021, falling from 1.39 billion to 1.17 billion last year according to Counterpoint Research. In percentage terms that is a drop of 38 per cent in two years, more than twice the rate of decline in computer shipments. However, in the first quarter of this year, there were signs of life in this industry segment too: sales rose by 11.8 per cent year-over-year according to International Data Corporation. IDC sees growth in average selling prices for smartphones too, with AI-driven innovation embedded in high-end models from Samsung, Apple and others. However, interestingly, it has been the lower-end models that saw the biggest shipment gains in the early going this year. (Data for phone shipments, as for computers is released with a long lag.) That is likely to change: as the technology in the high-end brands gets swisher and swisher, it will get harder for the stragglers to keep their footing.