The average price of a notebook computer in Europe has climbed more than 11 percent in the past year while desktop prices jumped over 10 percent. The increases stem from a severe shortage of memory chips that shows no signs of easing. Consumers who hoped to find a reliable laptop for under $500 may soon face slim pickings.

Memory costs have more than quadrupled over the last 12 months. DRAM and NAND components are scarce because manufacturers are shifting production capacity to high-bandwidth memory chips used in AI servers. These chips command higher margins and the AI boom has created insatiable demand for them. PC makers now compete for leftover supply.

Memory Shortages Fuel Price Hikes

Analyst firm Context tracked European distribution data for the first six weeks of the second quarter. Average notebook prices rose 11.4 percent year over year while desktop prices increased 10.5 percent. Revenue from notebook sales jumped 12 percent even though unit volumes shrank 3 percent. Desktop revenue rose 2 percent on 7 percent fewer units sold. The numbers show that customers are paying much more for fewer machines.

Senior analyst Marie-Christine Pygott noted that the market dynamic shifted sharply at the start of Q2. Unit volumes dropped after a period of intense stocking in Q1 when buyers rushed to avoid expected price hikes. Revenue continued to climb because average selling prices rose and buyers gravitated toward higher-end devices.

End users pulled forward purchases in the first quarter to dodge looming increases. Analysts expect memory prices to keep rising for the rest of this year and likely into 2026 as AI data center construction continues at a relentless pace.

PC Makers Shift to Premium Models

Manufacturers are not merely absorbing higher component costs. They are actively steering the market toward more profitable premium notebooks and desktops. Lenovo recently spoke about improving profitability in the current climate. Dell chief operating officer Jeff Clarke said the supply challenge is something the corporation is spending a tremendous amount of time on. He described lead times of a year for some advanced nodes and added that every bit and byte of supply matters.

HP CEO Bruce Broussard said the company mitigated higher input costs by reconfiguring products to use cheaper components and optimizing lower-cost inventory. HP also repriced products to reflect commodity increases. These actions helped the company deliver results above expectations in the latest quarter.

Why This Matters

The shift has direct consequences for everyday buyers. Sub-$500 laptops may become effectively unavailable by 2026 as vendors find it impossible or unprofitable to offer machines at those price points. Consumers on tight budgets will have to spend more or settle for older models. Schools and small businesses that rely on affordable hardware will feel the pressure.

Apple's MacBook Neo, the company's entry-level notebook, now accounts for a third of Apple's European notebook sales according to Context. That share matches the MacBook Air within Apple's notebook mix. Even Apple's most affordable option is selling strongly as the rest of the market moves upward in price.

The PC industry is being reshaped by forces outside the personal computing market. The AI boom has created a supply chain tug of war where memory makers prioritize servers over laptops. Until that imbalance corrects, rising prices will remain the new normal.