HP Eyes Software Differentiation as AI PCs Blur the Lines Between Device and Experience

PC brands have found themselves in a unique position ever since the rise of AI PCs. The terminology refers to a new class of computers that are equipped with dedicated neural processing units (NPUs) to power artificial intelligence (AI) capabilities and workflows. The chipsets are currently being manufactured by AMD, Intel, and Qualcomm's Snapdragon. On the other hand, Microsoft is currently managing the software end of AI capabilities, which is integrating its Copilot assistant across the entire Windows 11 operating system.

This means that original equipment manufacturers (OEMs) do not have full control over determining the direction and extent of the AI features in the laptops dubbed AI PCs (or Copilot+ PCs, if they meet specified requirements). Still, OEMs are managing a large part of the experience, such as the choice of components, premiumness of the material, optimisation of the processor, and battery life, is still driven by them. However, when it comes to the marketing jargon of AI PCs, these highlights tend to take a backseat.

Does this mean OEMs are dependent on the narratives set by AI (hardware and software) providers while bringing their devices to the market? And just how can they distinguish themselves from competitors when it comes to showcasing the unique selling proposition (USP) of their devices?

Questions are many, and to understand how PC brands are looking at the AI PC market and their go-to-market strategy, Gadgets 360 spoke with Vineet Gehani, Senior Director - Personal Systems category, HP India.

The Question About Adoption

The second generation of AI PCs has yet again brought about the question of the adoption of AI PCs. The global AI PC market was valued at $48.69 billion in 2024 and is projected to grow to $91.23 billion in 2025, reflecting a compound annual growth rate (CAGR) of 87.37 percent, according to MarketsandMarkets. Meanwhile, Research and Markets estimates the global laptop market to be worth $221.87 billion in 2024, rising to $241.37 billion in 2025. This indicates that AI PCs will account for 37.79 percent of the overall laptop segment next year, up from 21.95 percent in 2024.

Gehani believes the evolution of the technology and a push for on-device AI were the primary drivers behind HP's growth.

“We want to make AI real for users, and that's why we are not just talking about AI on the cloud, but as an ecosystem. AI is now available on the device. It is making the devices more productive, intuitive, productive, and collaborative while not compromising security,” he added.

While increased use cases are great news for those who want more out of their laptops, a major barrier is also the price point. Addressing the concern, Gehani said, “We are now expanding this to the entire range of products that we carry to market. So, other than the absolute entry level, all of the other products are now AI-enabled. It's about making the technology more accessible and making it more affordable.”

HP's Role in AI PCs

The OEM vs AI provider conversation is also interesting. We asked Gehani whether he felt brands felt the narrative of the AI-driven devices was moving away from them and going towards chipmakers and OS developers.

His response was a succinct, “If I were to flip the question, how would they carry it [the technology] to market?”

The message was clear. HP believes it controls the end product, and as such, the power of narrative remains in its hands. Additionally, from an ecosystem perspective, each player is working towards the same goal. However, this did not answer our main question — how are brands, then, supposed to distinguish themselves from one another?

Gehani points towards several first-party features HP has added to its AI PCs. There are three of them — the HP AI Companion, myHP app, and the Poly Camera Pro. The first is an AI-powered chatbot and document summarisation tool, the second is an AI-enabled control hub for various customisation settings on the device, and the third is a web camera app laden with AI capabilities.

Additionally, he highlighted that HP is also heavily invested in making AI PCs more power-efficient. One way of doing it is by optimising the chipset to allow for a diverse range of workflows, some of which might not require much AI usage. Apart from optimising power consumption on a hardware level, the company is also working on it on a software level.

“We are using smart sense technology (which can be controlled via the myHP app) to optimise the battery life based on what a user is doing on the device. It adjusts thermal output based on usage and monitors the external environment of the device,” he added.

Essentially, HP's strategy with AI PCs is to take whatever Microsoft and chipmakers are providing and then layer it with the brand's AI experience. “We make sure that we are in the best position to carry the technology, and then we layer it for users using in-house tools such as AI Companion, myHP, and the Poly Camera Pro,” Gehani explained.

But just differentiating is not good enough in this cut-throat market. Gehani let us know that HP holds 30 percent of the PC market share in India. But how does the company plan to continue to hold onto its lead and to build on it?

“The only way to stay ahead in the market is by deeply understanding customer needs and meeting them through devices — because that's ultimately the moment of truth. It's when users choose your product, return to it, or upgrade. With the ongoing refresh cycle triggered by Microsoft ending support for Windows 10 and pushing adoption of Windows 11, we see a strong opportunity to grow our market share,” he said.

What About Upgradability and the Microsoft Factor?

Since AI PCs are in a nascent stage, it is reasonable to believe that the growth in this space will also be rapid. We have seen the same happen when laptops first arrived as a portable form-factor in the 1980s, and then brands such as Toshiba, IBM, and Apple continuously disrupted the space.

So, assuming AI PCs do the same to the modern laptop space, will consumers have to worry about the upgradability of their devices as the existing models get outdated? Gehani said HP is taking care of this in two ways. “When it comes to software upgrades, we make sure to make them available to our users as soon as possible. From the hardware upgradability perspective, we have attractive exchange programmes that we run for both individuals and enterprises. We have worked to make it convenient for our users to trade in older devices and upgrade.”

The final topic of conversation comes as a hypothetical question that can very quickly turn into a concerning reality. So far, the trend in the AI space is as follows. Brands offer AI features to users for free for a limited period. Once a significant number of users have been onboarded, the company monetises the offering by creating paid subscriptions.

We have seen this playbook with OpenAI's ChatGPT, Google's Gemini, Samsung's Galaxy AI (which will be a subscription-based service starting in 2026), and even with Microsoft's Copilot platform. The question here is, what if Microsoft takes the same route with its Windows 11-based Copilot features in the future? Would a subscription model, which works in the tech giant's favour, not create an additional barrier for consumers looking to buy AI PCs?

Gehani said HP will continue to honour the offerings it has created for the consumers. Additionally, the company is also focused on improving the capabilities of AI PCs, and making them more affordable. However, when it comes to what Microsoft might do with its AI service, “I think time will tell what happens in the industry. It is something we will see as we go forward.”