Why the PC Upgrade Cycle to Windows 11 Will Stretch into 2026
372Many PC makers are saying the upgrade to Windows 11 isn’t happening as fast as some might think. Even though support for Windows 10 ends in just over a month, about half of all PCs are still running the older OS. This signals that many users and businesses are taking their time moving on.
PC Refreshes Are Still in Progress
Dell and HP executives shared that the push to upgrade to Windows 11 continues into this year and into 2026. HP’s CEO, Enrique Lores, mentioned that the switch is happening mainly in big companies first. Small and medium businesses are taking longer, often sticking with Windows 10 for now. They might buy extended support packages from Microsoft, which offers security updates until October 2028. These packages cost a bit more each year per device and are a way for companies to keep their systems secure while delaying a full upgrade.
Many businesses haven’t switched because they feel the upgrade doesn’t bring enough benefits or because budgets are tight. Ranjit Atwal from Gartner says that these companies will probably move to Windows 11 gradually over the next year. For them, the end of Windows 10 support is just one part of the puzzle. They will need to plan their upgrades carefully and may rely on Microsoft’s extended support options to stay protected.
AI PCs Are Changing the Market
On the consumer side, HP is seeing a big boost from AI-powered PCs. In the third quarter, HP’s consumer PC shipments grew by 8%, with about a quarter of their PCs now boasting AI features—a target they hit early. Their business-focused PCs grew more slowly but still saw a boost. HP’s revenue from personal computers increased 6% year-over-year, thanks in part to these AI devices.
Dell, meanwhile, experienced a different story. Its consumer sales dropped slightly, by about 7%, but the company made more profit because of higher prices. Dell expects moderate growth as the PC market continues to refresh, mainly because many users still have older computers and Windows 10 support is ending. There are hundreds of millions of PCs that can’t run Windows 11, so there’s still a lot of room for upgrades.
Dell’s shipment numbers show that the overall PC market grew by 6.5% in the third quarter, but Dell’s shipments fell by 3.2%. Lenovo and HP gained market share during this period. While Dell didn’t focus much on AI PCs during their earnings call, they did mention “AI-ready devices” and opportunities with enterprise AI servers.
HP is more bullish on AI PCs. They see a huge opportunity here, especially as applications like Zoom and Adobe start using AI chips in PCs to make tasks faster and smarter. Gartner predicts that AI PC shipments will reach nearly 78 million this year, making up about 31% of all PCs. By 2026, these shipments could nearly double to 143 million and represent over half of all PC sales.
Most of the benefits from AI in PCs can still be gained on regular computers, but that may change. As software begins to use on-device AI more effectively, future PCs will be able to offer advanced features in real-time, especially for private or personal data.
Rising Prices and Supply Chain Changes
Prices for PCs are going up, especially for AI models. HP reports that PCs with Microsoft’s Copilot+ AI chips cost about 5% to 10% more than similar models without AI chips. Part of the increase is also due to tariffs on imported goods in the US. These tariffs have prompted companies to move production outside China, which adds costs. Moving factories and adjusting supply chains isn’t cheap, and those costs are passed on to customers.
HP and Dell have tried to offset these costs by increasing inventory and shifting production to countries with lower tariffs. But now, those strategies are running out of steam. Both companies are expected to raise prices further to cover remaining costs.
Moving production out of China has been a key strategy. HP has shifted some manufacturing to the US, Thailand, Mexico, and Vietnam. Dell is investing in similar moves. These changes reflect a broader effort to avoid tariffs and keep supply chains flexible, but they also mean higher prices for consumers.
All in all, the PC market is in a period of transition. Windows 11 adoption is slow but steady. AI PCs are gaining ground fast, and prices are climbing due to supply chain shifts and tariffs. If you’re in the market for a new PC, expect to pay a bit more soon, especially if you’re interested in AI features. The next few years will be interesting to watch as these trends continue to evolve.
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