Gartner forecast on Thursday that global PC shipments will fall 10.4 percent from a year earlier this year, while smartphone shipments will drop 8.4 percent, due to a sharp rise in memory prices. It expects combined DRAM and SSD prices to rise 130 percent by the end of this year. PC prices are forecast to rise 17 percent and smartphone prices 13 percent.

Ranjit Atwal (란짓 아트왈), a senior director analyst at Gartner, said PC and smartphone shipments this year will be at their lowest level in more than 10 years. He said higher prices will narrow the range of products consumers can choose from and extend device lifespans, changing upgrade cycles.

Due to rising costs, the average lifespan of corporate PCs is expected to increase 15 percent by the end of this year, while consumer PCs are expected to increase 20 percent. Gartner forecast that delayed replacement will widen security vulnerabilities and make the management of aging devices more complex. It expects memory's share of PC bill-of-materials costs to rise to 23 percent this year from 16 percent last year.

Atwal said manufacturers will find it harder to absorb the burden from higher costs, weakening the business case for low-margin entry-level laptops. He said the entry-level PC market priced below $500 (about 700,000 won) is expected to disappear by 2028. Gartner also forecast that higher AI PC prices will delay the point at which AI PCs reach a 50 percent penetration rate to 2028.

Price increases for devices driven by higher memory costs are expected to have a bigger impact on the entry-level smartphone market. Consumers are more likely to choose refurbished products or used models, or keep using their existing smartphones longer. Gartner expects entry-level smartphone buyers to exit the market at a pace 5 times faster than premium buyers this year. It expects the impact to be relatively limited for premium smartphones, which have higher margins.

Soaring memory prices are expected to have the biggest impact on the PC market and reshape its profit structure. Atwal said device makers and distribution channels will face an important period in the first half of this year to optimise pricing and defend margins. He stressed that proactive steps are needed before rising component prices after the second quarter pressure profitability.