Back to basics: End-User device spending set to increase 7pc in 2018

WHAT is the life of an average electronic product? Five years? But consumers often prefer to change them when a new model arrives in the market – as do most businesses – because new models offer better security and more features.

Last year, worldwide shipments of devices — PCs, tablets and mobile phones —fell 3 percent. According to experts, it was because of the lack of “important new features” in new products.

However, according to new forecasts by Gartner, shipments are expected to grow again and reach a total of 2.3 billion units this year.

While the performance of shipments fluctuates from one year to the next, end-user device spending continues to rise and is forecast to increase 7 percent in 2018.

“Driven by better specifications despite increasing costs ASPs for devices rose by 9.1 percent in 2017, and this trend will continue through this year, where we expect prices will increase by 5.6 percent,” said Ranjit Atwal, Research Director, Gartner.

Despite PC prices increasing 4.6 percent in 2018, the PC market unit demand, driven by business buying, is stabilizing through 2018. However, the traditional PC market will decline 3.9 percent in units in 2018, and is expected to decline a further 3.6 percent during 2019.

Economic upheaval has affected the demand for devices variably across regions, suggests Gartner.

Argentina, Brazil, Japan, and Russia collectively lost nearly 25 percent of their device shipments between 2013 and 2017. “While the rate of recovery is varied regionally, most of the device types are now showing growth across these countries,” said Atwal. 

In countries suffering from significant economic turmoil, the extended lifetimes across all device types tend to remain stagnant. “As a result, as markets recover, they will fail to reach the unit volumes previously seen and will only recover to around 70 percent of those shipments by 2022,” added Atwal. 

AI will transform the smartphone industry in 2020

Gartner forecasts that global mobile phone shipments will increase 1.6 percent in 2018, with total mobile phone sales amounting to almost 1.9 billion units. In 2019, smartphone sales are on pace to continue to grow, at 5 percent year on year. 

Overall, analysts estimate that mobile phone lifetimes will increase from 2017 through 2020. “Premium phone lifetimes are expected to increase the most in the near-term, as users look to hold onto these devices due to a lack of new technology impact, prohibiting upgrades,” said Anshul Gupta, Research Director, Gartner.

Mobile phone lifetimes will start to reduce again beyond 2020. “By 2020, artificial intelligence (AI) capabilities on smartphones will offer a more intelligent digital persona on the device. Machine learning, biometrics, and user behavior will improve the ease of use, self-service, and frictionless authentications. This will allow smartphones to be more trusted than other credentials, such as credit cards, passports, IDs or keys,” said Gupta. 

Future AI capabilities, including natural-language processing and machine perception (reading all sensors), will allow smartphones to learn, plan and solve problems for users. “This is not just about making the smartphone smarter, but augmenting users by reducing their cognitive load and enabling a ‘Digital Me’ that sits on the device,” said Gupta.

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