Memory Price Hikes Will Kill Off Budget PCs and Smartphones, Analyst Warns
Source: Slashdot
Ballooning memory prices are forecast to wipe out entry‑level PCs and curb global shipments this year, with a similar impact expected for smartphones. Analyst firm Gartner projects a drop of more than 10 % in PC shipments and around 8 % in smartphone shipments in 2026, driven by an AI‑induced memory shortage. Prices for certain memory types have already doubled or quadrupled since last year, and Gartner expects DRAM and NAND flash used in PCs and phones to rise another 130 % by the end of 2026.
Impact on Budget PCs
Gartner research director Ranjit Atwal warns that budget PCs will disappear because vendors cannot build them at prices that satisfy cost‑conscious buyers.
“Because the price of memory is increasing so much, vendors lose the ability to provide entry‑level PCs—those below about $500,” Atwal told The Register.
Vendors could raise the price of their low‑cost models above the $500 threshold, but price‑sensitive customers are unlikely to purchase at those levels.
Impact on Smartphones
The same memory price surge is expected to depress smartphone shipments by roughly 8 % in 2026. Higher DRAM and NAND costs will force manufacturers to either increase device prices or cut margins, both of which could deter budget‑oriented buyers.
AI‑Focused Devices and Memory Demand
AI‑accelerated devices—systems equipped with neural processing units (NPUs) embedded in the CPU—were predicted to drive market growth. However, they require additional memory for AI workloads, further straining supply and pricing.
“Historically, downgrading specifications was the way to go when prices were being squeezed, but that’s difficult here,” Atwal said.
“The thinking was that the average price [of AI PCs] would fall this year and lead to more adoption, but that’s not happening.”
The lack of compelling killer applications for AI‑enhanced PCs compounds the challenge.
Source: quoted from a report in The Register; original story available on Slashdot.