Phone strength not enough to counter device spend slowdown – Gartner - Mobile World Live

Phone strength not enough to counter device spend slowdown – Gartner

20 JAN 2016

The worldwide combined devices market – PCs, tablets, ultramobiles and mobile phones – is set for the first ever decline in end-user spend during 2016, according to research from Gartner.

Spend, when measured in US dollars at constant rate, is expected to decline by 0.5 per cent. The market will continue to be impacted by country-level economic conditions, the company said.

“Driven by economic variations the market is splitting into four categories: economically challenged mature markets, economically stable mature markets and the same for emerging markets. Russia and Brazil will fall into the category of economically challenged emerging markets while India will be stable, and Japan will belong to the economically challenged mature market,” Ranjit Atwal, research director for Gartner, said.

In terms of shipment volumes, mobile phones will continue to dominate, increasing in volume in the period to 2018 (from 1.91 billion in 2015 to 2.03 billion by 2018), while the PC market will see shrinkage in “traditional” devices offset by growth in “premium ultramobiles” (products such as Microsoft’s Surface and Apple’s MacBook Air).

Shipments of “basic and utility ultramobiles” – iPads and other tablets fall into this group – remain basically flat for the full forecast period (198 million in 2018).

And while mobile phone shipments will increase by 2.6 per cent in 2016, with end-user spending expected to increase by 1.2 per cent, this will not be enough to offset slowed spending elsewhere.

Gartner noted that local and Chinese brands are offering more capable basic smartphones with appealing features at lower prices, meaning there is less need to upgrade to a “premium” smartphone.

Worldwide combined shipments of devices are expected to reach 2.44 billion units in 2016, a 1.9 per cent increase from 2015. In 2018 this number will hit 2.55 billion.

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Steve Costello

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