PC market enjoys growth in Q1

The prospects for the PC market are looking bleaker than expected, with analysts warning that memory and storage costs are going to be higher than forecasted.

As a result, the growth recorded in the global PC market in Q1 is not expected to be a pattern repeated in the second half of the year, according to Omdia.

The analyst firm found that the market improved by 3.2% year over year (YoY) in Q1, with 64.8 million units sold. Within that growth, the desktop category was the strongest, up by 5.4%.

One of the key factors driving that growth was the move by many across the channel to encourage customers to pull orders forward to avoid price rises coming because of memory and storage shortages.

The prospect of higher prices has been a reality that the PC world has been facing for the past few months, but Omdia warned that the market was set to get even more challenging after Q2.

“With supply chain pressures still building, Q1’s modest growth is likely to mark the high point for the year,” said Ben Yeh, principal analyst at Omdia. “Memory and storage costs are expected to rise further and more steeply than previously assumed from Q2, squeezing PC vendor gross margins and forcing them to pass costs through to channel partners and end-customers.

“AI datacentre buildouts are crowding consumer categories out of memory and storage supply, which have already seen roughly five-fold and three-fold cost increases respectively since Q1 2025. CPU prices are a smaller but compounding pressure, with Intel and AMD projecting increases of 10-25% into Q2,” he added.

The need for customers to move away from Windows 10 machines continued to drive PC spending, as well as the efforts by vendors to introduce fresh hardware – with an emphasis on AI capabilities – to tempt users looking to upgrade.

Regional analysis from Omdia indicated that some territories – for example, North America – have reached the stage where the channel has used up 2025 inventory stock and is now having to pass on price increases to customers.

In terms of vendor positions, Lenovo held onto its leading position in Q1 with YoY growth of 8.7%. HP was in second place but was hindered by a weak performance in Europe and the US, experiencing a decline of 4.9%. Dell enjoyed the quarter with a 7.8% improvement, building on the momentum it generated towards the end of last year.

The changing fortunes of the PC market are having an impact on the hardware-focused channel, with partners fearing it will undermine profitability in 2026.

Last month, Alastair Edwards, chief analyst at Omdia, shared research that the analyst company had undertaken to gauge partner concerns, reporting that vendors’ actions, particularly around hardware pricing, were making life increasingly difficult for partners.

“With many hardware vendors now refusing to hold hardware prices for partners until the point of shipment, or cancelling orders even after a purchase order has been received, partners are left carrying greater levels of risk. Those tied into contractual pricing agreements with customers face a potential disaster,” he stated.