Global spending on devices to grow 2% to S$840b this year: Gartner

SINGAPORE — Global end-user spending on new IT devices will increase by 2 per cent this year to nearly US$600 billion (S$840 billion), with mobile phones representing about 67 per cent of the amount, research firm Gartner said in a report released on Friday (April 7).

The projected spending increase comes as shipment volumes are expected to remain flat, as users of PCs, ultramobiles and mobile phones are buying new devices at higher average selling prices. Shipments of these devices are projected to total 2.3 billion units this year, in line with the previous year.

Component price increases are continuing into 2017, mainly for PCs but also to some extent for phones, which is resulting in more expensive products. Meanwhile, users’ interest in value and higher-quality phones is increasingly overriding their desire for low prices, the report said.

“Across the world, the device market is becoming less price-sensitive. Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products,” said Mr Ranjit Atwal, research director at Gartner.

Spending on mobile phones is on track to reach nearly US$400 billion this year, up 4.3 per cent from 2016, according to the report. “The increased average selling prices for mobile phones was driven by users across the board. They are replacing their basic phones with better-quality and more feature-rich basic phones, due to improved product portfolios from rising vendors such as (China’s) Huawei and Oppo,” said Ms Annette Zimmermann, research vice president at Gartner.

“The high-end smartphone average selling prices will continue to soar, given the announcement of the Samsung Galaxy 8 and the release of the 10th-anniversary Apple iPhone later this year,” she added.

The PC exodus has reached its peak but near-term growth of sales will be hampered by rising component costs. Component costs, especially for DRAMs, have doubled since June last year, according to the report.

“As a result, PC providers will increase the prices of PCs towards the end of the year. We expect the overall average selling prices for PCs to increase by 1.4 per cent in current US dollars,” said Mr Atwal.