The global devices market slowed down considerably last year, and things are not looking good for device manufacturers around the world. Gartner, one of the world’s leading market research firms, expects worldwide device spending to grow by a mere 2% in 2017. Even worse is the fact that Gartner says unit shipments will remain flat in 2017, which means the 2% growth is coming from a mix of price increases and higher-priced products – not a great way to grow.
PC sales, which have been on the decline for the past five years, are expected to decline in 2017 and 2018, and then recover somewhat in 2019. It must be a huge relief for many OEMs as well as PC component vendors that the PC market is close to the bottom, because the rate of decline was worrisome for that entire group.
The growth of smartphones has come down a long way from the double-digit yearly expansion it enjoyed during 2009-2015 period, and now it is expected to grow 10.6% in three years.
It’s Game On for the smartphone market, but now it’s going to be a game of market-share-grabbing rather than expanding the market itself. The only thing that can organically expand the market now is Internet penetration, but even there lies a hidden challenge.
The potential looks deceptively massive, but in emerging markets, the majority of the people who can afford a smartphone already have one or more devices. Even if Internet penetration expands into rural areas, the affordability factor might stump the growth of smartphone sales.
So, now, it’s more a question of taking customers away from the competition rather than creating more smartphone owners in order to show sales growth. Apple saw that happening with the iPhone, and it will continue to deepen. They may have a respite of a year or two while the buzz around the 10th anniversary iPhone lasts, but the competition is already tightening around Apple’s collar with the entry of Google and its Pixel smartphones.
One thing is certain: dominance in the smartphone market is going to be an uphill battle from now on, especially for the premium device makers like Apple, Samsung, Google and the soon-to-join Microsoft with its Surface Phone. It’s no wonder that device-revenue-heavy giants like Apple are trying to get more traction in other areas such as services, connected devices technology, augmented reality and so on.
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