On Arm PC return rates and CEO posturing

With her claim that retailers are seeing high returns of Arm PCs, Intel interim CEO Michelle Johnston Holthaus appears to be trying to scare buyers off the rival processor architecture. But enterprise buyers who look before they leap have little to fear.

Speaking at Barclay’s annual technology conference late last week, Holthaus said “if you look at the return rate for Arm PCs, you go talk to any retailer, their number one concern is, ‘I get a large percentage of these back because you go to set them up and the things that we just expect [to work], don’t work.’”

CIO reached out to Intel and Qualcomm for comment on Monday, but 24 hours after the request was made, had yet to receive a reply from either organization. The same applied to Microsoft, Dell, HP and Lenovo, all of whom offer devices based on Qualcomm’s latest processors, Snapdragon X Elite or X Plus.

Analysts were more forthcoming, with Jeremy Roberts, senior research director at Info-Tech Research Group saying, “high return rates for Snapdragon systems allegedly reported by retailers and touted by Intel leadership are neither here nor there for most business users.”

The reality, he said, is that “while you get some definite benefits from Arm-powered devices (battery life is a huge selling point), most desktop applications were built for x86 systems and will either need to be refactored or run through an emulator like Microsoft’s Prism. Your average retail buyer doesn’t care about instruction sets or emulation layers until things that they want to do, like play games or use applications, don’t work. Your typical business buyer does care about these things.”

Roberts added that he does not have insight into the reality of the higher return rates: “It’s possible that Intel is making a mountain out of a molehill, or that Qualcomm is downplaying a real threat to their business. But for the informed buyer, it shouldn’t matter.”

Anshel Sag, principal analyst at Moor Insights & Strategy, added, “the rumors of high rates of return for Qualcomm-based PCs have been a persistent one that came out prematurely. So, when we hear this get brought back up again, it makes me question how valid it is. Especially since I have yet to speak to anyone in the channel or OEMs has been able to validate these claims.”

He said sales numbers haven’t been as good as many had probably hoped, “but I also believe a lot of this has to do with Microsoft’s stumbles with features like Recall, which have reduced the value of going with a Qualcomm Copilot+ PC at launch.”

Sag said that, for enterprise buyers, “there is still a good amount of enthusiasm about what the platform could be, but it remains unclear if Microsoft, Qualcomm, and the OEMs have quite cleared the bar.”

He said he thinks that enterprises are still experimenting with Arm-based PCs, but they also know that, regardless of the chip vendor, the future of PCs will include Arm. “I think its really a maturity problem,” he noted, “especially with Microsoft creating a lot of doubt around Copilot+ with Recall, and the mixed capability across chip vendors.”

Sag predicted that the big trend to watch in 2025 will be to see how much the Copilot+ PC outgrows its early growing pains, and how many enterprises have been able to verify that their software runs natively or smoothly in emulation.

There will, he said, “be a lot of enterprises looking to replace their early pandemic machines or outdated Windows 10 PCs, and they will want something that has AI capabilities, even if those are primarily for future-proofing reasons. In my conversations with OEMs, there hasn’t necessarily been as much excitement for Arrow Lake-based Intel processors as much as there is for Lunar Lake, due to the limited AI capabilities and Microsoft’s desire to focus on Copilot+ PCs.”

“Compatibility is still a factor for Qualcomm here, but every week, there are major updates for Arm-based Windows PCs, and the platform gets better,” Sag added. “There are a lot of factors at play here, but I think most people who are going out and buying a Qualcomm system know what they are getting and want that long battery life with no-compromise performance.”

Meanwhile, Roberts said, end user computing decision makers working in a corporate IT department should, “review their requirements and management tools and ensure compatibility before purchasing devices. And they probably wouldn’t do this through the retail channel anyway.

“To me, this is an interesting potential story about adoption, but it’s not really relevant to enterprise IT — assuming very basic due diligence is conducted.”