In yesterdays’ live show, we adjusted for this news in real time, and that will be on the podcast feed this weekend to give you insights into strategies for handling the tariff rollercoaster.
The Nasdaq Composite surged over twelve percent, marking its second-best day ever and its best session since January 2001. This rally was driven by a pause in tariffs announced by President Donald Trump for certain countries, leading to a significant rebound in the stock market. Notably, Apple shares soared more than fifteen percent, recovering from a four-day trading slump that had seen its market value drop by seven hundred seventy-four billion dollars. Other major tech companies also saw impressive gains, with Tesla and Nvidia rising by eighteen and twenty-two percent, respectively. The VanEck Semiconductor ETF, which tracks semiconductor stocks, soared over seventeen percent, experiencing its best day ever.
Also coming to light is what is happening with hardware. In the first quarter of 2025, PC shipments in the United States surged by nine point four percent to sixty-two point seven million units, driven by manufacturers rushing to deliver products ahead of impending tariffs. Notebook shipments rose to forty-nine point four million units, marking a ten percent increase from the previous year, while desktop shipments grew by eight percent to thirteen point three million units. Analysts from Canalys reported that companies like Lenovo and HP increased their shipments to the U.S. by about twenty percent and thirteen percent, respectively, as they prepared for potential cost hikes. By the end of 2025, most major PC manufacturers are expected to have shifted U.S.-bound shipments out of China to enhance supply chain resilience. A recent Canalys poll found that fourteen percent of PC resellers believe their small and mid-sized business customers are unaware of the end of support for Windows 10, which could lead to higher costs when these businesses eventually refresh their PC fleets. The impact of tariffs on consumer demand is expected to be significant, as higher prices for PCs may force consumers to prioritize spending on other essentials.
In fact, the company Framework, who I covered earlier this week, gave some specific insights into how that works. Quoting the Verge for the timeline:
- At 12:01AM ET Wednesday, Trump’s new tariffs went into effect, including an incredible 104 percent tariff on China and a 32 percent tariff on Taiwan.
- At 12:30PM ET, Framework announced a 10 percent price hike on all its computers, one it never thought it would need to introduce because it doesn’t make computers in China. (It does make them in Taiwan.)
- At 1:18PM ET, just over 12 hours after the new tariffs were officially in place, Trump announced a 90-day pause on tariffs for most countries but an increased 125 percent rate for China.
- At 1:48PM ET, Framework announced that nope, actually, it’s bringing prices back to normal.
- At 3:43PM ET, Framework announced that some prices will still reflect increased tariffs on China.
Things are still a bit convoluted, but here’s the general lay of the land: since Trump is still imposing 10 percent tariffs on Taiwan, Framework will continue a pause on selling some of its cheapest laptop configurations “where we’re unable to absorb the remaining 10% tariff.” Additionally, some of Framework’s made-in-China modules now cost more, like $15 for a USB-C port rather than $9, or $49 for an Ethernet card rather than $39 — and Framework says systems that ship with those modules will see those same price increases.”
I found it interesting that CRN’s reporting says customers are eager to purchase new devices. I’ve included a link to that story.
According to a recent global partner survey conducted by Canalys, a significant shift in the business models of partners is underway, with hardware dropping to only 13% of profitability by 2025. The survey revealed that while hardware still represents a substantial market, with one trillion dollars of IT hardware expected to be shipped alongside an equal amount in software, partners are increasingly moving toward profit-rich services such as consulting and managed services. In fact, for every dollar of hardware, there is an opportunity for two dollars in managed services. This evolution indicates that partners are now participating in an average of 3.2 distinct business models, highlighting the growing trend towards service-oriented revenue streams.
Why do we care?
SMBs are pulling forward purchases to dodge cost increases. I’d hardly qualify that as being eager. While CRN reports enthusiasm for new devices, Canalys and the tariff timeline suggest SMBs may pull back if prices rise post-surge.
More broadly, Hardware Is the Doorway, Not the Destination. The Canalys survey underlines that for every $1 of hardware, there’s $2 in managed services opportunity. The winners don’t just resell hardware. They wrap it with service: lifecycle management, security hardening, fleet analytics, and AI integration.
This quarter’s spike is a reaction to policy uncertainty, not a durable demand trend. Once the pipeline clears, MSPs could face a dry quarter with delayed refreshes and margin compression.
Short-term? Grab the refresh cycle. Long-term? Use it to pivot toward recurring services and consultative models. And catch more analysis on the live show, available now on YouTube and dropping on audio feed on Saturday.
