Rising memory prices are set to undo the positive momentum seen in the PC market over the past year, driven by Windows 11 upgrades and the transition to devices with built-in artificial intelligence (AI).
The expected cost increases for memory are eye-watering, with Gartner predicting a 130% surge in combined dynamic random access memory (DRAM) and solid-state drive (SSD) prices by the end of this year. An increase like this would push PC prices up by 17% compared with last year.
PC market forecasts from Gartner add to the sense of a tumultuous market, with the analyst firm expecting PC shipments to decline by 10.4% this year and smartphones sales to decrease by 8.4% on last year.
The consequences for the channel will not only be around the need to juggle rising prices and handle increasing customer discontent, but also a change to buying patterns. Gartner anticipates the lifecycle of a PC to increase by 15% for enterprises and 20% by consumers by the end of this year.
The decision to sweat existing devices for longer could have security implications, particularly if those PCs were in line for a move to Windows 11.
“This is the steepest contraction in device shipments witnessed in over a decade. Higher prices will narrow the range of devices available, prompting buyers to hold on to devices for longer, fundamentally altering upgrade cycles,” said Ranjit Atwal, senior director analyst at Gartner.
The proportion of build materials taken up by memory is expected to reach 23%, up from 16% last year, and put pressure on vendors, particularly in the entry-level end of the market, which is price sensitive. At the other end of the market, the move towards higher-value AI devices is also set to be affected.
“This sharp increase removes vendors’ ability to absorb costs, making low-margin entry-level laptops non-viable. Ultimately, we expect the sub-$500 entry-level PC segment to disappear by 2028,” said Atwal. “In addition, rising AI PC prices will delay the projected 50% market penetration of AI PCs until 2028.”
This is the steepest contraction in device shipments witnessed in over a decade. Higher prices will narrow the range of devices available, prompting buyers to hold on to devices for longer, fundamentally altering upgrade cycles
Ranjit Atwal, Gartner
The changing market dynamics will force vendors and their partners to choose between eroding margins, by going after buyers attracted by lower prices, or accepting reduced profitability from lower unit sales.
“Overall, device vendors and channels face a critical window in the first half of 2026 to optimise pricing and protect margins before component inflation compresses profitability from the second quarter onwards,” he added.
Refurbished kit specialists are also responding to the price rises by advising customers to consider using a wider range of sources for the SSDs they need for AI infrastructure roll-outs, such as buying pre-used technology.
“The traditional view of refurbished tech as a last-resort option is outdated. Today’s enterprise-level SSDs are sourced from high-quality environments, and are data-wiped and tested to rigorous standards, with robust warranties that ensure reliable performance,” said Peter Miller, refurbished technology expert at ETB Technologies.
“The key to maximising performance within budget is recognising that not every AI workload requires the latest SSD “on the market” – or not, as the case may be. It does, however, require predictability, availability and cost-effective scalability,” he added.
