What's Happening?
The average selling price (ASP) for PCs in the United States surpassed $1,000 for the first time in the second quarter, according to Omdia. This represents a 12.0% year-on-year increase. U.S. PC shipments grew by 1.0% to 18.8 million units in the quarter, following
a 7.0% decline in the first quarter. However, Omdia forecasts this growth to be temporary, expecting a 10.7% decline for the full year. The increase in shipments is attributed to retailers and channel partners stocking up in anticipation of rising memory and storage costs, effectively borrowing volume from future quarters. Revenue for the U.S. PC market increased by 13.1%, four times faster than shipment volume, as OEMs prioritized the production of higher-margin, higher-cost PCs due to component constraints. The impact was most pronounced in the business segment, where ASPs rose 19.0%, while consumer ASPs increased by 9.7%. Shipments of PCs under $699 dropped by 6.5%, whereas those above $1,500 surged by 36.8%. AI PCs constituted 48.3% of U.S. shipments in the quarter and are expected to exceed 50% in the third quarter.
Why It's Important?
This milestone of the average PC price exceeding $1,000 signifies a significant shift in the U.S. PC market, driven by a combination of supply-side pressures and a strategic focus on premium products. The 'borrowed volume' from future quarters suggests an impending slowdown in shipments, which could impact manufacturers and retailers in the latter half of the year and into 2027. The substantial increase in revenue despite modest shipment growth indicates that PC manufacturers are successfully navigating component shortages by prioritizing higher-priced, higher-margin devices. This trend benefits companies like Apple, which saw a 32.1% growth in shipments and moved into third place in the U.S. market, and HP and Dell, which increased revenue while shipping fewer machines. Conversely, the decline in shipments for lower-priced PCs and the significant drop in government sector purchases (down 24.4%) highlight a growing affordability gap and budget constraints for certain segments of the market. The rise of AI PCs also points to a technological shift, with consumers and businesses increasingly investing in more advanced, and typically more expensive, computing solutions.
What's Next?
Omdia forecasts a challenging period ahead for the U.S. PC market, with an anticipated 18.4% decline in the second half of 2026 and a further 4.9% reduction in 2027. The firm expects ASPs to continue rising into early 2027, but these higher prices are unlikely to offset the projected loss in volume. The 'borrowed volume' from the second quarter is expected to create a 'hole' in future shipment numbers, which will be tested by third-quarter results. The supply of memory, particularly from companies like Micron, could face disruptions due to potential labor actions, further impacting component availability and pricing. While the U.S. market experienced a quarter of growth, European markets are projected to see significant declines in laptop and desktop shipments, indicating a divergence in regional trends. The long-term outlook suggests that neither the consumer nor commercial segments are expected to return to growth before 2028, partly due to many U.S. enterprises having already refreshed their PC fleets in 2025 ahead of Windows 10 support ending.
Beyond the Headlines
The sustained increase in PC prices and the shift towards premiumization could have broader implications for digital inclusion and access to technology. As the average cost of a PC rises, it may become more challenging for lower-income households, educational institutions, and small businesses to afford essential computing devices, potentially widening the digital divide. The growing dominance of AI PCs also signals a fundamental change in computing requirements and user expectations, pushing the industry towards more powerful and specialized hardware. This trend could accelerate the obsolescence of older, less capable machines, creating a continuous upgrade cycle for those who can afford it. Furthermore, the divergence between the U.S. and European markets highlights the impact of regional economic conditions and procurement strategies on global technology trends. The structural repricing observed in the phone market, where higher prices become the new norm, could also become a lasting feature of the PC market, fundamentally altering consumer spending habits and industry profitability models.
