U.S. PC shipments drop 7% as budget segment collapses

If you have been looking for a cheap laptop or desktop under $500, this report explains exactly why those options are disappearing and when prices might finally drop. New Q1 2026 data confirms the worst decline in the U.S. PC market since late 2023. Consumers who wanted affordable machines are finding that even entry-level systems now cost as much as mid-range ones did two years ago. This shift is driven by a sharp 18.7% year-on-year drop in sub-$500 shipments during the first quarter.

Budget PC options vanish as average prices hit $1,000

U.S. PC shipments fell 7% year-on-year in Q1 2026, totaling 15.8 million devices. The decline is attributed to component shortages and price hikes driven by tariffs and HBM/DRAM supply issues. These supply chain constraints have forced manufacturers to raise prices across the board. The average PC price is projected to exceed $1,000 by the end of 2026.

Dell became the market leader in Q1 2026 with 25% share, overtaking HP. AI PCs accounted for 44% of the market share in Q1 2026. This high percentage reflects the loose manufacturer definitions of AI-enabled hardware rather than a specific performance tier. The market is currently defined by a polarization between expensive AI-capable machines and the vanishing budget segment.

Recovery is not expected until 2029, with interim growth predicted in 2027. This timeline suggests that budget buyers will face high prices for several more years. The current market structure favors premium buyers who can absorb the cost increases. Entry-level consumers must wait for the projected stabilization in 2029 to find affordable options again.