The end of the era of cheap electronics. The AI ​​boom, geopolitics and chip shortages are driving up equipment prices

Cheap technological devices are slowly disappearing from the shelves. The confluence of global chip shortages, geopolitical tensions and massive artificial intelligence investments are relentlessly driving cost increases. Both consumers and businesses must prepare for a new, much more expensive reality on the IT market.

Rising prices hit the technology sector with a vengeance. Even before the recent escalation of the conflict involving Iran, electronic equipment was becoming more expensive. The main culprit? A global shortage of memory chips that experts predict will persist for a long time, compounded by endless supply chain disruptions.

The effects of these problems can be seen in hard data. As Business Post reports, citing analyzes by the research company IDC, global shipments of personal computers (PCs) will fall by 11.3 percent this year. This is a drastic revision of forecasts – in November, a decline of only 2.4 percent was expected. Similar pressure is on the tablet market, where IDC expects a 7.6% decline in shipments in 2026.

Although IDC data was collected before the situation in the Middle East worsened, analysts have no doubt: the specter of a broader conflict is another huge blow to the hardware industry.

– The list of industrial and geopolitical shocks continues to grow. Making business decisions, and in some segments even survival, becomes almost impossible – comments Ryan Reith, head of the devices division at IDC. He adds that today the biggest problem for companies is not the costs themselves, but the complete uncertainty as to when the market situation will stabilize.

The AI ​​paradox: drives demand, dries up the market for chips

Alleviating the situation is not made easier by artificial intelligence fever. Massive investments in AI technologies are sucking memory chips out of the market, and analysts warn that there are simply no quick solutions to this problem. Supply bottlenecks could weigh on the global technology sector well into the 2030s.

Limited supply inevitably drives up prices. Currently, an interesting phenomenon is taking place on the hardware market: although manufacturers are selling fewer devices, they are generating higher revenues per unit sold. IDC estimates that global PC sales revenues will increase by 1.6% this year. (up to USD 274 billion), and in the case of tablets by 3.9%. (up to USD 66.8 billion). – The era of cheap PCs and tablets is over for now. Rising average selling prices and higher component costs are permanently changing the balance of power in the market – emphasizes Jitesh Ubrani, IDC analyst. Memory producers are expanding their processing capacity, but achieving market balance will take years, and a return to the former low prices seems unlikely.

Computers under $500 will disappear from the market

This is echoed by experts from the analytical company Gartner, who also predict a sharp slowdown. According to them, in 2026, PC shipments will shrink by 10.4% and smartphone sales will decline by 8.4%. year to year. The main reason is the expected jump in the prices of DRAM memory and SSD drives – they may increase in price by a shocking 130% by the end of the year.

This will translate directly into customers' wallets: computers may increase in price by an average of 17 percent, and smartphones by 13 percent. The biggest victim of this situation will be the budget devices segment. According to Gartner's forecasts, the category of computers costing less than $500 will completely disappear from the market by 2028.

In response to rising prices, consumers and companies are changing their habits – they are choosing more expensive premium equipment, but they intend to use it much longer. It is estimated that by the end of 2026, the computer life cycle will be extended by 15%. in the business sector and by as much as 20 percent for private users. However, this creates new challenges: an aging fleet of devices means a greater risk of cyberattacks and more difficult management of IT infrastructure.

However, there is a technological paradox hidden in this whole situation. Artificial intelligence, which is currently driving up demand for chips and production costs, may prove to be a lifeline in the future. Analysts estimate that AI-based systems will be able to automatically solve up to 60 percent. problems in supply chains. In an era of rising trade tensions, automated real-time data analytics will become crucial.

What does this mean for the economy?

The macroeconomic consequences of this situation are serious. Rising technology prices ricochet across the entire economy – from consumers to big business. For European export powers (such as Germany, whose economy is closely linked to the Polish market), a sharp increase in IT infrastructure costs may slow down planned investments. And for households, higher spending on essential digital equipment means less money in the wallet for other goods, which could further stifle overall consumer demand.

DWN(Bonnier Group)/AO