Rising component costs could eliminate the sub-$500 PC market entirely by 2028, according to Gartner. Memory and storage prices have surged dramatically, with DRAM and NAND Flash costs expected to increase by 130% by year's end. This shift pushes memory from 16% to 23% of total PC manufacturing costs, making budget machines unsustainable for manufacturers.

Ranjit Atwal, Senior Director Analyst at Gartner, explains that vendors can no longer absorb these rising costs while maintaining profitability on entry-level devices. The analysis shows PC prices will climb approximately 17% compared to 2025 levels. Additionally, AI PC adoption faces delays, with 50% market penetration now projected for 2028 instead of earlier estimates.

PC shipments are forecast to drop 10.4% in 2026 as manufacturers shift focus to premium segments. While total unit sales decline, revenue may remain stable or increase due to higher average selling prices. The traditional budget PC category faces extinction as manufacturers abandon sub-$500 builds that yield minimal profits.