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Demand for personal computers with hardware that can handle artificial intelligence tasks, or AI PCs, is cooling faster than expected globally and India isn’t an exception. Gartner has cut its 2026 global forecast for AI PCs to 49% of total PC shipments from the 55% estimate it made in late 2025 as buyers are reluctant to pay higher prices while waiting for software that can justify the upgrade.
As they cost 20-40% more than regular models, many buyers still don’t see a clear reason to pay more for on-device AI features, analysts said. At the recently concluded Consumer Electronics Show (CES) in Las Vegas, Dell acknowledged that consumers aren’t as enthusiastic about AI PCs as had been expected. That's prompted the company to get back to its "roots with a renewed focus on consumer and gaming.”
The lack of “mature, must-have use cases for on-device AI” is putting consumers off from having to pay a premium, said Rishi Padhi, principal analyst at Gartner. Early users report better battery life and improved audio and video quality, but these are seen as minor advances and not enough to trigger substantial upgrade cycles.
Hardware constraints are adding to the problem with memory emerging as a key bottleneck.
“DRAM (dynamic random access memory) scarcity is significantly impeding the transition from standard PCs to AI PCs,” Padhi said.
For instance, Microsoft’s Copilot+ AI PCs have a hardware specification that’s pushed up the bill of materials, making them harder and more expensive to build, at a time when memory supply remains tight.
For India, this means a slower build-up than expected. AI PC manufacturing in the country is mainly limited to local assembly and final production, while key parts such as processors and memory are imported. This makes local output dependent on global supply availability and demand trends.
“AI PC demand has not picked up as much as anticipated, but adoption is gradually improving,” said Bharath Shenoy, senior analyst at IDC.
He said Lenovo is continuing to expand local assembly capacity, while HP and Dell are expected to scale up their locally assembled AI PC mix over the next two years, supported by Intel’s strong push around AI PCs.
“Rising RAM (random access memory) prices and some component supply shortages are challenges, but they should not be a major concern for local AI PC manufacturing,” Shenoy said.
He expects demand to improve by late 2026 as users begin to see clearer and more practical use cases for AI PCs.
HP remains optimistic despite the current slowdown.
“India is one of the leading markets for PCs for us. Our expectation was that within two years, more than 50% of PCs would be AI PCs,” Enrique Lores, then HP president and CEO, had told ET late last year. “It was a conservative estimate, since in just three quarters, 25% of the PCs shipped by us are AI-enabled. In the next quarters, we expect to see more software applications being developed to run AI at the edge, which will accelerate the transition even more.”
Lores recently quit HP for Paypal.
Counterpoint Research said the current phase reflects adjustment, not retreat.
“We are not seeing any formal announcements of OEMs freezing AI PC manufacturing for FY26 in India,” said Anshika Jain, senior analyst at Counterpoint. “What we are seeing instead is a recalibration of rollout timelines and production volumes, driven by near-term demand signals and pricing sensitivity.”
She said this is linked to costs rather than any loss of confidence in India as a manufacturing base. The production-linked incentive (PLI) programme and the China+1 strategy continue to support local production. Counterpoint expects adoption to pick up in 2026 as enterprises start a new replacement cycle.
Lenovo declined to provide detailed data on AI PC manufacturing and demand, while HP did not respond to queries.
Analysts said AI PC manufacturing in India will continue, but growth will be slow until prices ease and software clearly shows what users can gain from upgrading.
As they cost 20-40% more than regular models, many buyers still don’t see a clear reason to pay more for on-device AI features, analysts said. At the recently concluded Consumer Electronics Show (CES) in Las Vegas, Dell acknowledged that consumers aren’t as enthusiastic about AI PCs as had been expected. That's prompted the company to get back to its "roots with a renewed focus on consumer and gaming.”
The lack of “mature, must-have use cases for on-device AI” is putting consumers off from having to pay a premium, said Rishi Padhi, principal analyst at Gartner. Early users report better battery life and improved audio and video quality, but these are seen as minor advances and not enough to trigger substantial upgrade cycles.
Hardware constraints are adding to the problem with memory emerging as a key bottleneck.
“DRAM (dynamic random access memory) scarcity is significantly impeding the transition from standard PCs to AI PCs,” Padhi said.
For instance, Microsoft’s Copilot+ AI PCs have a hardware specification that’s pushed up the bill of materials, making them harder and more expensive to build, at a time when memory supply remains tight.
For India, this means a slower build-up than expected. AI PC manufacturing in the country is mainly limited to local assembly and final production, while key parts such as processors and memory are imported. This makes local output dependent on global supply availability and demand trends.
“AI PC demand has not picked up as much as anticipated, but adoption is gradually improving,” said Bharath Shenoy, senior analyst at IDC.
He said Lenovo is continuing to expand local assembly capacity, while HP and Dell are expected to scale up their locally assembled AI PC mix over the next two years, supported by Intel’s strong push around AI PCs.
“Rising RAM (random access memory) prices and some component supply shortages are challenges, but they should not be a major concern for local AI PC manufacturing,” Shenoy said.
He expects demand to improve by late 2026 as users begin to see clearer and more practical use cases for AI PCs.
HP remains optimistic despite the current slowdown.
“India is one of the leading markets for PCs for us. Our expectation was that within two years, more than 50% of PCs would be AI PCs,” Enrique Lores, then HP president and CEO, had told ET late last year. “It was a conservative estimate, since in just three quarters, 25% of the PCs shipped by us are AI-enabled. In the next quarters, we expect to see more software applications being developed to run AI at the edge, which will accelerate the transition even more.”
Lores recently quit HP for Paypal.
Counterpoint Research said the current phase reflects adjustment, not retreat.
“We are not seeing any formal announcements of OEMs freezing AI PC manufacturing for FY26 in India,” said Anshika Jain, senior analyst at Counterpoint. “What we are seeing instead is a recalibration of rollout timelines and production volumes, driven by near-term demand signals and pricing sensitivity.”
She said this is linked to costs rather than any loss of confidence in India as a manufacturing base. The production-linked incentive (PLI) programme and the China+1 strategy continue to support local production. Counterpoint expects adoption to pick up in 2026 as enterprises start a new replacement cycle.
Lenovo declined to provide detailed data on AI PC manufacturing and demand, while HP did not respond to queries.
Analysts said AI PC manufacturing in India will continue, but growth will be slow until prices ease and software clearly shows what users can gain from upgrading.
