Proposed tariffs could raise PC prices by 46 per cent

The US PC market, excluding tablets, experienced a 7 per cent year-on-year growth in Q3 2024, with shipments reaching 17.9 million units, according to research from market analysts Canalys.

Canalys said that this growth was largely driven by notebooks, which saw a 9 per cent annual increase in shipments.

Looking ahead, Canalys forecasts that the recovery of the US PC market will continue, but at a slower pace than previously expected. 

“The Windows refresh cycle is losing momentum, and macroeconomic policies are presenting headwinds,” said Canalys Analyst Greg Davis.

Total PC shipments to the US are predicted to rise by 6 per cent in 2024, reaching just under 70 million units. 

However, growth is expected to slow further, with only a 2 per cent increase anticipated in both 2025 and 2026.

The commercial segment of the market has remained strong, with shipments growing by 12 per cent in Q3 2024. 

The ongoing Windows 11 refresh is expected to continue, with commercial demand remaining robust through the end of 2024 and into early 2025.

“While growth earlier in the year was bolstered by consumer purchases, the commercial market has become the leading segment for PCs in the US,” Davis explained. 

“Both large and small businesses have begun exhibiting stronger refreshes of their PC fleets with Windows 11 devices as we entered the second half of the year,” he added.

In the consumer space, seasonal discounting events such as Black Friday and Cyber Monday are expected to give a boost to shipments in Q4.

The transition to Windows 11 remains gradual, with many businesses yet to make the switch. 

“A sizable portion of fleet refreshes will happen after the end of service date for Windows 10, which is just 10 months away,” Davis said. 

“This is due to the relatively modest pace of the transition so far.”

PC market expectations for 2025 and beyond have been tempered by potential policy changes from the incoming administration. 

“With the 2024 US Presidential election coming to a close, macroeconomic conditions in the US are not expected to be as stable in the near-term as they have been over the last year or two,” Davis added.

The proposed import tariffs could significantly impact the PC market, Canalys stated.

A study by the Consumer Technology Association (CTA) suggests that device prices could rise by as much as 46 per cent due to the tariffs, creating considerable downside risks for the market.

“Signals from the supply chain suggest there will be some stockpiling of inventory in early 2025 to get ahead of the anticipated rise in prices,” Davis said. “This will likely lead to a rebalancing of the shipment seasonality next year.”

A longer-term risk factor lies in proposed public sector budget cuts, which could affect federal government and education procurement of PCs. 

“Although 2025 budgets will remain largely intact, we anticipate future spending on technology from these areas could be reduced,” Davis concluded.