Brace for Impact: Rising Hardware Costs Threaten IT Budgets
Rising Prices Due to Tariffs
As we navigate through 2025, the technology industry faces unprecedented challenges that demand immediate attention. The threat of rising prices on technology hardware, especially laptops and desktops, is becoming increasingly urgent. A 25% tariff imposed on these products is set to drive prices up by 34%, creating a significant financial burden for businesses and consumers alike.
Impending End-of-Life for Windows 10
Adding to this urgency is the impending end-of-life for Windows 10 on October 14th. With over 500 million PCs still running Windows 10, the need for upgrades is critical. This massive transition is likely to strain supply chains, leading to potential shortages in hardware. The combination of rising prices and limited availability makes it imperative for businesses to act now rather than waiting until the end of the year to undertake infrastructure upgrades.
Shifting U.S. Trade Policy
The U.S. is shifting its trade policy under President Donald Trump, who has declared the trade deficit a national emergency. Initially, the administration proposed a staggering 145% tariff on Chinese goods, which was later reduced to 30% during a 90-day negotiation period. Despite this reduction, the impact on technology hardware remains severe.
Specific Data on Price Increases
According to the Consumer Technology Association, a 25% tariff on all products in the consumer electronics space could increase PC prices by 34%. Ed Brzytwa, Vice President of International Trade at the Consumer Technology Association, warned that the tariff war is "going to lead to higher costs for consumers ultimately and for households."
Supply Chain Impact
The end-of-life for Windows 10 and the imposition of tariffs are creating a perfect storm for supply chains. As businesses rush to upgrade their systems before the October deadline, the demand for hardware is skyrocketing. This surge in demand, coupled with the increased costs due to tariffs, is putting immense pressure on manufacturers and suppliers. The result is longer lead times, higher prices, and potential shortages of critical components.
Manufacturers are struggling to keep up with the sudden spike in orders, and the global supply chain is feeling the strain. Key components such as semiconductors, memory chips, and processors are in short supply, further exacerbating the situation. Businesses that delay their hardware procurement may find themselves facing significant delays and higher costs as the year progresses.
Recommendations for Businesses
At Common Knowledge Technology, we urge businesses to take proactive measures to mitigate the risks associated with rising prices and supply chain disruptions. Here are some specific recommendations:
- Plan and Execute Upgrades Promptly
Don’t wait until the last minute to upgrade your systems. Start planning and executing your hardware upgrades now to avoid the rush and potential shortages later in the year. - Invest in Quality Hardware
While it may be tempting to cut costs by opting for cheaper hardware, investing in quality components can save you money in the long run. High-quality hardware is more reliable and has a longer lifespan, reducing the need for frequent replacements. - Monitor Market Trends
Stay informed about market trends and potential disruptions. Regularly monitor news and updates related to tariffs, trade policies, and supply chain issues to make informed decisions. - Work with Trusted Partners
Partner with trusted IT providers who can offer expert advice and support. At Common Knowledge Technology, we have the expertise and resources to help you navigate these challenging times and ensure your business remains resilient. We provide IT warranty, license, hardware, and overall life cycle management to our clients.
Don’t wait until Q4 to make a move. If you have not upgraded your Windows 10 Machines or waiting to purchase IT hardware in the Q4, you will probably incur higher costs and supply issues.
Contact Common Knowledge Technology today to plan any IT upgrade projects now.
