If you still have Windows 10 PCs to replace, what does this mean for you?
Kinetics is at the Canalys industry conference in Vietnam this week, and we’ve just been warned about a trend that’s going to impact all of us in the next few months. It’s even worse if you are planning a PC refresh or Windows 11 migration in the next few months. The AI boom is changing the equation.
The Problem: AI Is Eating Your PC Budget
The hundreds of billions being poured into AI data centres has created a massive side effect: DRAM prices have jumped 170% year-over-year. Memory manufacturers are abandoning consumer PC chips for the far more profitable High Bandwidth Memory (HBM) that powers AI accelerators.
Memory prices are rising 30% in Q4 2025 and another 20% in early 2026. Since memory represents 10-25% of a PC’s cost, you’re looking at 5-10% overall device price increases. That $1,200 PC? It’ll be $1,320+ by mid-2026.
Dell’s COO put it bluntly: “We have not seen costs move at the rate that we’ve seen.”
Three Ways This Hits Your Business
1. Budget Models Are Vanishing Manufacturers are cutting low-margin products. That entry-level replacement strategy may not exist anymore.
2. Specs Are Shrinking To maintain price points, some manufacturers are trimming RAM and storage. A 16GB system becomes 8GB at the same price.
3. Everything Costs More It won’t just be PCs. Smartphone makers warn of “sizeable price rises”, and analysts forecast device markets will shrink 2% in 2026. Even hyperscalers are only getting 70% of memory orders filled.
The Windows 11 Trap
Windows 10 support ended October 14, 2025. If you are still to replace devices, then you are now caught between:
- Migrating now: Higher costs but you’re secure
- Waiting: Running unsupported systems (major security risk)
- Extended Security Updates: Additional licensing costs, and this just delays the inevitable and you will still need to migrate eventually
None of these are ideal. Strategic planning is essential.
It will only get worse:
Industry forecasts show:
- Q4 2025-Q1 2026: Steepest price increases
- Mid-2026: Prices stay elevated, limited relief
- Late 2027-2028: Possible normalisation (maybe)
Building new chip fabrication facilities takes years. AI demand isn’t slowing. This could be a multi-year supercycle.
What Kinetics Recommends
Act Now on Critical Systems Don’t wait if systems are end-of-life or need Windows 11. Prices will keep rising through mid-2026.
Be Strategic About Everything Else
- Assess what must be replaced versus what can wait
- Consider memory upgrades to extend current devices
Lock in Pricing and Specs Get firm commitments. Volatile markets mean configurations and prices can change between order and delivery.
Rethink Your Refresh Cycle This exposes the risk of being locked into hardware replacement schedules you don’t control. Consider:
- Staggered refresh cycles spreading costs across years
- Virtual desktop infrastructure reducing hardware dependency
- Device-as-a-Service models transferring pricing risk
Track the Situation
Resources for ongoing updates: