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Soaring memory costs are projected to drive worldwide PC shipments to decline 10.4% and smartphone shipments to drop by 8.4% in 2026, compared to 2025 levels, according to Gartner, Inc., a business and technology insights company.
Gartner estimates a 130% surge in combined DRAM and solid-state drive (SSD) prices by the end of 2026, which will increase PC prices by 17% and smartphone prices by 13%, compared to 2025 levels. This situation will concentrate demand on premium devices.
“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.
Because of rising costs, Gartner expects PC lifetime to increase by 15% for business buyers and 20% for consumers by the end of 2026. These delayed upgrades will further raise concerns over increased security vulnerabilities and challenges of managing older devices.
“The sub-$500 entry-level PC segment will disappear by 2028.” – Ranjit Atwal, Sr Director Analyst at Gartner
Entry-Level PCs Face Obsolescence
PC memory costs are expected to peak at 23% of the total bill-of-materials (BOM) up from 16% in 2025. “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 Atwal. “In addition, rising AI PC prices will delay the projected 50% market penetration of AI PCs until 2028.”
Basic Smartphones Take the Biggest Hit
The memory-driven price surge will disproportionately affect entry-level smartphones, leading buyers to choose refurbished or second-hand models or keep their phones longer. Premium smartphones will be less affected because of their higher margins.
Gartner analysts expect basic smartphone buyers to exit the market five times faster than premium buyers in 2026.
Critical Pricing Windows Opens in the First Half of 2026
Soaring memory prices are expected to impact the PC market hardest, reshaping its financial dynamics. As a result, PC vendors should be prepared to accept a unit volume decline to sustain profitability, rather than eroding margins to chase price-sensitive 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,” said Atwal.
