PC upgrades to Windows 11 have slowed sharply, even though Microsoft ended mainstream support for Windows 10 a year ago. Analysts say elevated CPU and memory prices are keeping computer costs high and encouraging consumers and businesses to delay replacements.
The rising cost of processors has been described as “chipflation,” while expensive memory has been dubbed the “RAMpocalypse” or “RAMageddon.” Dean McCarron, principal analyst at Mercury Research, said PC prices were already elevated and that measures such as Intel’s CPU price increases were adding to the cost of new systems. Higher prices, he said, reduce demand and create a deferred upgrade cycle.
Microsoft’s Windows revenue from PC manufacturers fell 27% in its latest quarter and missed expectations, Chief Financial Officer Amy Hood said during the company’s earnings call. A rush to replace Windows 10 machines had supported PC demand the previous year, but sales have since slowed. Manufacturers are also holding unsold inventory, according to Hood.
Usage data reflects the slowdown. StatCounter reported that Windows 10 remained installed on 27.7% of Windows PCs worldwide in September 2026, slightly above its 26.45% share in February. Windows 11’s share rose from roughly half of Windows PCs in October 2025 to 72.57% in February, after Windows 10 mainstream support ended, but fell to 71.5% in September. Extended security updates remain available for businesses and consumers, with businesses paying a substantial fee.
Enterprise upgrades involve more than the price of new hardware. Neil Shah, vice president of research at Counterpoint Research, said companies replacing systems at the end of Windows 10 support must also decide whether to invest in expensive AI PCs. He said the combination of market trends is weakening demand and lengthening the replacement cycle, while buyers wait for better deals and lower prices.
Counterpoint said a rush to purchase PCs before further memory-related price increases lifted shipments by 3.2% in the first quarter of 2026. Shipments then declined 4% in the second quarter and 21% in the third. Commercial replacements and Windows migrations offered some support, but were not enough to counter the wider contraction. Counterpoint expects a 27% year-over-year decline in the fourth quarter of 2026.
Analysts do not expect PC prices to stabilize in 2027. McCarron said memory costs could remain high while much of the supply is directed to data centers supporting artificial intelligence. Intel has indicated that its PC chip business will remain weak through the rest of 2026 and into 2027, while its lowest-cost PC processor, Wildcat Lake, is sold out.
Steven Dickens, principal analyst at Hyperframe Research, said supply constraints affecting memory and other PC components could continue through 2029. PC vendors are responding with restricted configurations and bundles, he said.
AI is not yet the main driver of PC upgrades, which continue to follow a conventional replacement cycle. However, Dickens said high-end systems capable of running large language models locally are becoming a significant part of the market and are raising average device prices.
Analysts expect the market to recover eventually as enterprises can no longer postpone replacements indefinitely. McCarron said an extended downturn could lead to a larger upgrade cycle later, comparing the delayed demand to a compressed spring that snaps back when released.
Sources: Computerworld.