PC prices to remain elevated until end of 2027
Computerworld ·
IDC has bad news for enterprises upgrading PCs: don’t expect prices to come down any time soon. PC prices are already high due to constrained supplies and surging memory and component costs. Geopolitical tensions and an uncertain global economy won’t make the situation any better. “A weaker economy could soften demand further, and with prices still high and supply constrained, the outlook for the remainder of 2026 and going into 2027 could deteriorate,” IDC analysts said in a press release last week. The third quarter of 2026 was a disaster for PC makers, with shipments falling 20.1% year over year. PC makers and their channel partners stocked up on inventory earlier in the year ahead of memory-driven price hikes. The focus in the third quarter was on clearing out that leftover inventory amid dried-up demand. “Channels are now worried about carrying too much inventory into a market where high prices are suppressing demand,” said Jitesh Ubrani, a research director at IDC. Within the existing inventory, low-cost PCs are harder to find. For example, HP is making higher-priced PCs a larger part of its product mix so it can generate higher revenue amid declining PC shipments. HP’s chief financial officer, Karen Parkhill, said in an August earnings call that the company is prioritizing “higher-value unit placements, repricing for higher commodity costs” to offset the lower volume of PC shipments. “We continue to expect memory and storage costs to increase further as a percentage of the bill of materials,” Parkhill said. Enterprises picked up new PCs earlier in anticipation of price increases and are now pulling back, said analyst Jack Gold of J. Gold Associates. That’s partially because PC makers are passing higher memory and component costs on to customers, Gold said. Many new PCs have AI hardware accelerators and qualify as AI PCs . Microsoft CEO Satya Nadella at an event last week said AI PCs accounted for 40% of PC shipments. HP said on its earnings call that AI PCs made up 46% of its PC shipments in the fiscal quarter that ended July 31. The big question is whether AI PCs have any utility. HP is rolling out its own on-device AI software, called HP IQ , on its PCs to enhance the user experience. HP PCs also have an AI-based security tool from Wolf Security that protects against BIOS-level intrusion, said Ketan Patel, the company’s president of personal systems, on the August earnings call. But companies are rethinking the typical three-to-four-year PC upgrade cycle because most AI work still happens in the cloud, Gold said. “They have been spending big on infrastructure and cloud services to implement new AI solutions, which don’t need the latest PC hardware,” he said. Hardware makers are now building even faster PCs — dubbed “agentic AI PCs”— that cut token costs by running AI locally. Microsoft has dubbed that hardware as “Builder PCs.” Agentic AI PCs with GPUs have more horsepower to run high-end LLMs and cut cloud-based token costs. But those PCs, such as Microsoft’s Surface Laptop Ultra and HP’s ZBook Ultra G3a mobile workstation, cost more than $2,500, which may be too expensive for cash-strapped enterprises. Agentic AI PCs could help cut token costs, but “whether that really means the category has been reinvented is still up for debate,” Technalysis Research analyst Bob O’Donnell said in a research note . Lenovo topped IDC’s global PC shipment chart in the third quarter of 2026. The company shipped 14.9 million units, a 22.6% decline from the same quarter last year, and held a 23.8% market share. HP was in second place, with 10.3 million units shipped, a 30.9% year-over-year decline. The company held a 16.5% market share. Dell was third, with 7.6 million PC shipments, a year-over-year decline of 25%. Apple was in better shape than its Windows counterparts, with 5.9 million units shipped, down 11.3% year over year. Asus and other PC makers accounted for the remainder.
IDC has bad news for enterprises upgrading PCs: don’t expect prices to come down any time soon. PC prices are already high due to constrained supplies and surging memory and component costs. Geopolitical tensions and an uncertain global economy won’t make the situation any better. “A weaker economy could soften demand further, and with prices still high and supply constrained, the outlook for the remainder of 2026 and going into 2027 could deteriorate,” IDC analysts said in a press release last week. The third quarter of 2026 was a disaster for PC makers, with shipments falling 20.1% year over year. PC makers and their channel partners stocked up on inventory earlier in the year ahead of memory-driven price hikes. The focus in the third quarter was on clearing out that leftover inventory amid dried-up demand. “Channels are now worried about carrying too much inventory into a market where high prices are suppressing demand,” said Jitesh Ubrani, a research director at IDC. Within the existing inventory, low-cost PCs are harder to find. For example, HP is making higher-priced PCs a larger part of its product mix so it can generate higher revenue amid declining PC shipments. HP’s chief financial officer, Karen Parkhill, said in an August earnings call that the company is prioritizing “higher-value unit placements, repricing for higher commodity costs” to offset the lower volume of PC shipments. “We continue to expect memory and storage costs to increase further as a percentage of the bill of materials,” Parkhill said. Enterprises picked up new PCs earlier in anticipation of price increases and are now pulling back, said analyst Jack Gold of J. Gold Associates. That’s partially because PC makers are passing higher memory and component costs on to customers, Gold said. Many new PCs have AI hardware accelerators and qualify as AI PCs . Microsoft CEO Satya Nadella at an event last week said AI PCs accounted for 40% of PC shipments. HP said on its earnings call that AI PCs made up 46% of its PC shipments in the fiscal quarter that ended July 31. The big question is whether AI PCs have any utility. HP is rolling out its own on-device AI software, called HP IQ , on its PCs to enhance the user experience. HP PCs also have an AI-based security tool from Wolf Security that protects against BIOS-level intrusion, said Ketan Patel, the company’s president of personal systems, on the August earnings call. But companies are rethinking the typical three-to-four-year PC upgrade cycle because most AI work still happens in the cloud, Gold said. “They have been spending big on infrastructure and cloud services to implement new AI solutions, which don’t need the latest PC hardware,” he said. Hardware makers are now building even faster PCs — dubbed “agentic AI PCs”— that cut token costs by running AI locally. Microsoft has dubbed that hardware as “Builder PCs.” Agentic AI PCs with GPUs have more horsepower to run high-end LLMs and cut cloud-based token costs. But those PCs, such as Microsoft’s Surface Laptop Ultra and HP’s ZBook Ultra G3a mobile workstation, cost more than $2,500, which may be too expensive for cash-strapped enterprises. Agentic AI PCs could help cut token costs, but “whether that really means the category has been reinvented is still up for debate,” Technalysis Research analyst Bob O’Donnell said in a research note . Lenovo topped IDC’s global PC shipment chart in the third quarter of 2026. The company shipped 14.9 million units, a 22.6% decline from the same quarter last year, and held a 23.8% market share. HP was in second place, with 10.3 million units shipped, a 30.9% year-over-year decline. The company held a 16.5% market share. Dell was third, with 7.6 million PC shipments, a year-over-year decline of 25%. Apple was in better shape than its Windows counterparts, with 5.9 million units shipped, down 11.3% year over year. Asus and other PC makers accounted for the remainder.