Canalys: AI PCs to Grow 204% by 2025, Huge Opportunities in Middle East Consumer Electronics Market
Canalys forecasts that AI PCs will grow by 204% by 2025, with 85% of shipments coming from Windows devices. Corporate demand will surge by 310%, focusing mainly on productivity tools such as text and image generation, meeting minutes, aiming to reduce people's working hours. In the second half of 2024, the Middle East (excluding Turkey) is at a crossroads of rapid technological transformation and geopolitical complexity. Despite regional challenges, the consumer electronics market (including smartphones, PCs, tablets, and IoT) continues to attract substantial investment. The region's digital ecosystem and tech-savvy population are both expanding, presenting significant opportunities for innovation and growth.
Canalys points out that the growth of AI PCs in the consumer market (136%) will primarily come from niche users in content creation, education, and gaming. At the same time, AI smartphones will continue to be the core hub of the user's device ecosystem, with a strong growth of 62% in 2025, driven by high-end models from Apple and Samsung.
Post-pandemic, the consumer electronics market in the Middle East has undergone a transformation. Significant changes have occurred in the region, particularly in terms of population growth, economic diversification, and digital transformation. According to data from Standard & Poor's (S&P), the region's population has grown by 9% since 2019 and is expected to reach 218 million by 2024. Geographic location, favorable tax policies, and increasing job opportunities continue to attract South Asian expatriates, trends that are driving socio-economic growth in major markets. Economic reforms are gaining momentum, with Saudi Arabia and the UAE heavily investing in non-oil sectors, attracting over $22 billion in foreign investment in 2023.
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The Middle East's tourism industry has also seen dramatic growth, with the number of international tourists in the first seven months of 2024 increasing by 26% compared to 2019. S&P reports that tourism and leisure sales have grown by 31% compared to 2019, reaching $148 billion. Driven by smartphone penetration rates of over 90% in some countries, digital technology adoption has surged, with e-commerce and social commerce developing rapidly. Governments are also promoting sustainable development and AI initiatives, with the UAE and Saudi Arabia leading the way, aiming for AI to make significant contributions to their GDP by 2030. Despite urbanization and economic growth reshaping the region, challenges such as youth unemployment, extreme climate conditions, and resource management persist, and economies continue to explore solutions.
AI will act as a catalyst across industries and influence consumer behavior. Since 2023, generative artificial intelligence (GenAI) has evolved from an emerging technology into a core driver of consumer behavior, changing decision-making processes and shaping brand expectations. As GenAI becomes increasingly intertwined with daily life, its impact will extend to how consumers discover products, search for information, and access shopping experiences through smartphones, PCs, and consumer IoT devices. Key factors influencing satisfaction and purchase decisions include:
Workplace AI applications drive upgrades: In 2024, the Middle East experienced the evolution of hybrid work arrangements, a phenomenon reshaping the region's workplace environment and emphasizing the welfare of the labor market, remote productivity, and the impact of Generation Z entering the workforce. Today, AI tools play a crucial role in improving performance through real-time guidance and intelligent assistance, driving market demand for AI smartphones, PCs, and IoT devices, thus presenting significant business opportunities for manufacturers and retailers.
Canalys forecasts that AI PCs will grow by 204% by 2025, with 85% of shipments coming from Windows devices. Corporate demand will surge by 310%, focusing mainly on productivity tools such as text and image generation, meeting minutes, aiming to reduce people's working hours. The growth of AI PCs in the consumer market (136%) will primarily come from niche users in content creation, education, and gaming. At the same time, AI smartphones will continue to be the core hub of the user's device ecosystem, with a strong growth of 62% in 2025, driven by high-end models from Apple and Samsung.
AI-enhanced retail increases efficiency, improves experiences, and has the potential to boost demand growth: Canalys data shows that in 2024, 86% of smartphone shipments in the Middle East were achieved through retail channels, reflecting a strong preference for in-store shopping.