U.S. PC Market Struggles Amid Tariff Threats; Economic Woes Compound the Problem
In the ever-evolving landscape of technology, the US PC market is facing a series of challenges this year. According to Greg Davis, an analyst at Canalys, these economic changes are likely to impact consumer spending throughout the rest of the year.
The slower-than-expected sales of AI-enabled PCs in 2025 are primarily due to tariffs and market uncertainty causing buyers to hold back. Initial forecasts anticipated a faster adoption, with AI PCs expected to capture a 43% market share. However, current projections estimate a 31% market share instead, reflecting a 32% lower sales volume than initially expected.
The persistent inflation and weak job reports in recent months have led consumers to prioritise essentials like food and energy expenses over premium electronics. As a result, shipments to distributors and resellers fell 1.4 percent year-on-year in calendar Q2 to 18.6 million units.
The US PC industry is currently experiencing inventory indigestion due to resellers over-ordering hardware to avoid potential import taxes on China-made kit. This situation, coupled with the threat of tariffs on computers assembled in China and shipped to the US, caused suppliers to navigate a complex regulatory maze earlier in the year. Trump's import tariffs could potentially raise the cost of a laptop for Americans by 68%.
In an effort to steer customers towards AI PCs, Microsoft and computer brands are amplifying the noise around the end of life for Windows 10. However, consumers in the US are more willing to wait until their PCs need to be replaced due to greatly diminished performance or hardware failures.
Despite the challenges, there are signs of growth in other sectors. If Canalys' forecast is correct, there will be an 8.3% increase in commercial sales, a 9.9% increase in government sales, and a 0.3% increase in education sales in 2025. However, consumer sales are expected to decline by 3.9%.
Notably, business adoption of AI has more than doubled over the last two years and is expected to increase by 50 percent in 2025. Lenovo, a computer brand, initially thought it could navigate geopolitical changes, but Trump's sudden tariff changes have affected their plans.
In a separate development, a Californian man is suing Microsoft due to his forced Windows 11 upgrade. Dell COO Jeff Clarke stated that PC growth is "moderate."
In conclusion, the US PC market is facing a complex set of challenges in 2025. While there are signs of growth in certain sectors, the consumer market is expected to decline. The ongoing tariff disputes and economic uncertainties continue to impact consumer spending and the industry's overall health.
