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Market Downturn After Nine Quarters of Growth
IDC reports a nearly 5% drop in shipments
Worldwide PC shipments fell by nearly 5% to 68.2 million units in the first quarter of 2026, marking the first decline in two years and breaking a streak of nine consecutive quarters of growth, according to data from the International Data Corporation (IDC). The downturn began in late 2025, coinciding with the escalation of a global memory shortage driven by surging demand for AI-related hardware.
This decline affects a market that had been steadily recovering from earlier supply chain disruptions. The memory shortage, which IDC expects to persist until at least 2028, has led to significant price increases across the technology sector, impacting not only PCs but also other consumer electronics.
Rising Revenues Amid Falling Shipments
Manufacturers pass price hikes to consumers faster than demand drops
Despite the drop in unit sales, PC manufacturers are reporting higher revenues. IDC researcher Jitesh Ubrani noted: "The real story here is the disconnect between units and dollars: shipments are falling, but revenue is climbing." This is because vendors are pushing through price increases more rapidly than demand is declining, Ubrani explained.
Ubrani warned that further price hikes are expected into 2027, and he anticipates an even steeper decline in shipments later this year as current inventory depletes and consumers face additional cost increases. He cautioned that this trend could significantly disrupt the typical PC upgrade cycle, as higher prices may lead users to delay replacing their machines.
The memory shortage, which has been exacerbated by the AI boom, has driven up costs for key components such as DRAM and NAND flash. Manufacturers have largely passed these costs on to consumers rather than absorbing them, a pattern that has drawn criticism from industry observers.
Apple Bucks the Trend with MacBook Neo Growth
Shipments rise 800,000 units year-over-year, but price hikes loom
Apple was the only major PC maker to report an increase in shipments, thanks to strong demand for its MacBook Neo line. The company shipped 800,000 more PCs in the quarter compared to the same period in 2025, boosting its market share from 8.5% to nearly 10%.
However, Apple has not been immune to the memory-driven price increases. The entry-level MacBook Neo has risen from $600 to $700, while an entry-level MacBook Air now costs $1,300. Outgoing CEO Tim Cook acknowledged the challenge in a recent statement: "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases." He added, "We definitely need memory pricing and supply to return to reasonable levels for consumer products."
Apple reported $68.5 billion in cash on hand for the most recent quarter, a 41% increase year-over-year, and its market valuation now exceeds $4.6 trillion. The company's financial strength allows it to weather supply pressures, but it has chosen to pass on cost increases to consumers rather than reduce its profit margins.
Global Impact and Uncertain Outlook
Memory crisis expected to last until 2028, affecting upgrade cycles
The memory shortage, driven by AI-related demand for high-bandwidth memory and other components, has created a ripple effect across the global technology industry. IDC projects that the shortage will not ease until 2028, meaning consumers and businesses may face elevated PC prices for years to come.
The decline in shipments could slow the adoption of newer technologies, such as AI-capable PCs, as higher prices deter upgrades. For businesses, the rising cost of hardware may delay refresh cycles, potentially affecting productivity and security if older systems remain in use longer than planned.
The situation highlights a growing tension between the AI sector's demand for memory and the broader consumer electronics market. While AI companies and memory suppliers benefit from higher prices, PC makers and consumers bear the burden. As Ubrani noted, vendors are bracing for further price increases, and the typical upgrade cycle may be severely hampered.
Without a resolution to the memory supply constraints, the PC market faces an extended period of reduced unit sales and elevated prices, with Apple's recent gains standing as a rare exception in an otherwise contracting market.
Based on reporting from engadget.com
