Dubai
Looking at the smart computing devices such as PCs, tablets and smartphones, only smartphones are the only segment registering growth this year.
Overall smartphone shipments will grow five per cent this year, reaching nearly 1.6 billion units. End-user spending continues to shift from low-cost “utility” phones toward higher priced “basic” and “premium” smartphones.
The smartphone market is now more dependent on new devices that offer something different, as users are extending their purchasing cycles and need to be enticed to make a replacement.
Ranjit Atwal, research director at Gartner, said that overall the shipment growth of the device market is steady for the first time in many years.
“PC shipments are slightly lower while smartphone shipments are slightly higher — leading to a slight downward revision in shipments from the previous forecast,” he said.
Worldwide shipments of PCs, tablets and smartphones are expected to exceed 2.3 billion units in 2017, a decline of 0.3 per cent from 2016. The market is forecast to return to growth in 2018 with a 1.6 per cent increase in shipments.
He said that PC shipments are on pace to drop three per cent this year, but the rate of decline is slower than in recent years, alleviated by Windows 10 replacement purchasing.
Moreover, he said that the impact of higher component pricing on PCs such as DRAM memory and SSD hard drives is being reduced for buyers as producers absorb some of the cost into their margins — fearing the alternative of a reduction of their share of a competitive market.
“PC buyers continue to put quality and functionality ahead of price. Many organisations are coming to the end of their evaluation periods for Windows 10, and are now increasing the speed at which they adopt new PCs as they see the clear benefits of better security and newer hardware,” he said.
Robert Cozza, research director at Gartner, said that continued premium smartphone growth will also be highly dependent on the forthcoming anniversary edition of Apple’s iPhone, which should bring more-drastic feature and design upgrades than the last few iterations.
She said that the “basic” smartphone market is expected to record 686 million shipments in 2017, up 6.8 per cent from 2016.
“Consumers have already accepted the greater value attained from the better capabilities of basic smartphones, compared to low-end utility devices. Therefore, the average selling prices of mid- and high-range smartphones continue to increase,” she said.
The Chinese players currently pushing basic smartphones with premium feel and features into the market will continue “to strengthen the shift away from low-end utility phones” toward basic smartphones.
The total installed base for these devices is currently around 7 billion units, so she said that vendors are constantly looking at ways to add new capabilities that can give their products an edge in the market.
Many new technologies — such as artificial intelligence (AI) and virtual personal assistants (VPAs) — will grow in adoption throughout the forecast period, yet it is difficult to see any revolutionary impact in early iterations.
“Today, the user experience with new technologies such as AI and VPAs is too often below the standard found in the rest of the device, and the cost to raise the standard quickly is prohibitive, relative to the benefits,” Atwal said.
In the near term, he said that the device market will continue to be driven by ‘incremental advances’ in traditional technology, but, looking three or four years ahead, the device market will begin to see very significant shifts in both usage patterns and form factors, especially as 5G wireless technology is introduced.
