Memory crisis could see the entry-level PC market disappear by 2028

The analysts at Gartner are predicting that PC shipments will decline by 10.4% in 2026 due to the current memory and storage crisis affecting the consumer technology market. And with that, Gartner estimates that DRAM and SSD prices will surge by 130% by the end of the year, driving PC prices up by 17%.

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"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, Sr Director Analyst at Gartner. A sentiment shared by many, and one that feels like the expected outcome of a situation where data centers and the AI market are buying up anything and everything, and are willing to spend the money to do so.

However, as prices rise, Gartner predicts a sharp increase in the total bill of materials (BOM) for building PCs and laptops, effectively killing the entry-level laptop and PC market. "This sharp increase removes vendors' ability to absorb costs, making low-margin entry-level laptops nonviable. Ultimately, we expect the sub-$500 entry-level PC segment will disappear by 2028," Ranjit Atwal adds.

Interestingly, this AI-born crisis will also slow the adoption of AI PCs, that is, laptops and desktop PCs with powerful NPUs and GPUs capable of running local AI models. Previously, the firm predicted a 50% market penetration of AI PCs by 2028, which has now been delayed. Outside the PC space, the firm also notes that the smartphone industry will take the 'biggest hit' as memory prices will 'disproportionately affect entry-level smartphones,' leading buyers to look to the refurbished or second-hand market for an affordable upgrade.

As for the high-end PC and smartphone market, they won't be going away. Gartner predicts that many companies will be forced to accept the reality of "unit volume decline to sustain profitability." Translation, fewer products, across the board.