Global PC and smartphone sales are expected to fall by more than 10% this year, according to analysts, as hyperscaler investment in AI data centers fuels a memory shortage. PC shipments will fall 10.4% during 2026 compared to 2025, as the constrained memory supply leads to higher prices, according to Gartner . IDC predicts a slightly larger 11.3% decline over the same period. The smartphone market will also see significant year-on-year shipment declines in 2026 — down 8.4% according to Gartner, or 12.9%, according to IDC. “The current situation is now more negative than even our most pessimistic scenarios suggested just a few months ago,” IDC said in a blog post Thursday . The analyst firm in December had previously forecast a worst-cast 8.9% drop in PC shipments . “The speed at which the memory pricing has increased has shocked everybody,” said said Ranjit Atwal, research director at Gartner, with an expected 130% year-on-year rise in 2026. “This is a demand-side issue. The demand that’s available is all going to hyperscalers; the PC guys and the smartphone guys are getting squeezed.” For PC vendors, increased memory costs will account for 23% of the total bill-of-materials cost this year, according to Gartner, up from 16% in 2025. This will feed through to PC prices, which are expected to rise by 17% in 2026, the researcher predicted. Large PC makers are more equipped to weather the storm, analysts said, but will still be affected. HP said in its first quarter earnings call that memory now accounts for 35% of the costs to build a PC, up from between 15% and 18% the previous quarter. The situation is more dire for smaller vendors and those already operating on wafer-thin margins. “Consolidation isn’t off the map here,” said Atwal. “It’s survival of the fittest as much as anything.” For enterprise buyers, higher prices are likely to lengthen PC refresh cycles, increasing by 15% during 2026, according to Gartner. Enterprise buyers are now negotiating with vendors in a fast-changing market. “They’re trying to work out what is a good price at this moment,” said Atwal. “Vendors aren’t guaranteeing prices for long now, they’re saying this is the price and it’s available for two or three weeks.” Budget contraints mean that some PC purchases will be offset, said Atwal. For businesses that moved to Windows 11 on existing devices last year, that could be problematic. “That then causes issues as…Microsoft will no doubt be bringing new Windows 11 capabilities, and you may not have the hardware capabilities [to] run some of that.” Businesses will continue to invest in AI PCs , said Atwal, but at a slower rate, and are likely to purchase devices with reduced memory. The disruption is expected to continue for the foreseeable future. “Price is not only increasing in the short term…, it’s going to remain high almost through to the end of 2027,” said Atwal, pointing to structural changes in the market. “We’re advising to buy now, or wait [until prices stabilize again], because whatever you’re getting at the moment is going to be the best price.”