A 130% surge in combined DRAM and SSD prices by the end of 2026 will push PC prices up 17% compared to 2025 levels and wipe out the sub-$500 PC market entirely by 2028, according to a forecast published by research firm Gartner on February 26. The price shock will drive global PC shipments down 10.4% this year versus 2025, the steepest annual contraction in over a decade, as consumers and businesses hold onto existing hardware rather than upgrade.

The root cause is component inflation, with Gartner projecting that memory costs will climb from 16% to 23% of a PC's total bill of materials this year, a shift large enough to eliminate vendors' ability to absorb costs on low-margin products. Entry-level laptops under $500 become financially unviable at that ratio, and Gartner expects that price tier to be gone from the market within two years.

"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," said Ranjit Atwal, senior director analyst at Gartner.

Gartner previously projected AI PCs would reach 50% market penetration before the end of the decade, but rising memory prices on premium-tier hardware will also push that milestone back to 2028. AI PCs, of course, require more onboard memory to run local inference workloads, making them especially exposed to DRAM cost increases.

Longer upgrade cycles will follow directly from higher prices, and Gartner says that PC lifetimes will extend by 15% for business buyers and 20% for consumers by the end of 2026, a trend it noted will raise concerns about security vulnerabilities on aging hardware.

For the PC market, demand will increasingly concentrate at the top end, where vendors carry enough margin to absorb component inflation without destroying profitability. Gartner advised vendors to accept unit volume decline rather than cut prices to chase budget buyers. "Overall, device vendors and channels face a critical window in the first half of 2026 to optimize pricing and protect margins before component inflation compresses profitability from the second quarter onwards," Atwal said.

The forecast covers smartphones as well, where shipments are projected to fall 8.4% this year. Gartner estimated basic smartphone buyers will exit the market five times faster than premium buyers in 2026 as rising costs push consumers toward refurbished or second-hand alternatives.

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