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PC market showing calm before the storm
The first 10 weeks of the year have shown PC growth, according to the latest analysis from Context
The prospect of higher PC prices due to component shortages has led to customers making moves to secure hardware before costs spiral.
As a result, the PC market, which is bracing itself for a challenging year, enjoyed some calm before the storm, with Context tracking solid year-on-year growth in early 2026.
The first 10 weeks of the year saw sales of notebooks going through European distributors improve by 10% and desktops by 18%, with uncertainty over prices a factor along with the ongoing need by users, particularly those still on Windows 10, to upgrade.
Digging into those growth figures across Europe reveals regional differences, with the UK flat compared with the same period last year. That compares with strong growth in France, which has seen distributors building up stocks.
There is also a sense that the channel is driving orders, with resellers encouraging customers to get ahead of price rises and buy at a more attractive rate.
“Market performance remains strong on the surface, but it is being fuelled by pull-forward demand rather than long-term stability,” said Marie-Christine Pygott, senior analyst at Context.
“Partners are actively buying ahead to secure 2025 price structures, knowing that this window is closing fast,” she added.
Temporary buffer
Average sale prices in distribution are yet to skyrocket, but Context warned that was most likely due to a temporary buffer caused by 2025 stocks being flushed through the system.
“Distributor inventory is currently insulating parts of the market from the full impact of memory inflation, but this is a temporary effect,” said Pygott. “As we move towards the end of Q2 and into Q3, that stock will run out, and pricing will inevitably reset in line with underlying component costs.”
Although the first month and a half might have shown resiliency for the hardware channel, the impact of memory shortages is being felt across the wider supply chain. Prices have increased by three to fourfold the levels seen in Q3 last year. That has seen vendors become increasingly short-term in settling on list prices, making life increasingly difficult for channel partners attempting to deliver on a quote to customers.
Context is forecasting a year very much of two halves, with the first showing resilience as stocks at 2025 prices are wound down, but once gone, the full effects of the shortages will be felt.
“Businesses need to prepare for a very different market dynamic in the second half,” said Pygott. “What we are seeing now is not a slowdown, but a shift. The real test will come when supply tightens, and pricing fully catches up with the reality of the component market.”
Last week, Context shared research that indicated the UK retail sector was dealing with the challenges of a tight market and managing inventories.
“With lower seasonal volumes, and products now selling at reduced average selling prices to clear shelves, there may be some inventory challenges ahead,” said James Bates, senior retail analyst at Context. “This comes at a time when the technology sector has been worried about supply shortages and spiking price levels. But if the UK retail channel remains overstocked with older units, this may not materialise in the near term.”
