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Gartner Says Worldwide End-User Spending on Devices Will Grow 2 Percent in 2017, While Unit Shipments Remain Flat

By CR Team

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CR Team

Users of PCs, ultramobiles and mobile phones are buying new devices at higher average selling prices (ASPs), resulting in growth in end-user spending in 2017. Gartner, Inc. estimates that end-user spending will increase by 2 percent in 2017, to nearly $600 billion in current U.S. dollars. Spending on mobile phones will represent 67 percent of that figure (see Table 1).

We estimate that ASPs for computing devices and mobile phones will increase by 2 percent in 2017 in current US dollars, for two main reasons. First, component price increases are continuing into 2017 (mainly for PCs but also to some extent for phones), which is resulting in more expensive products. Second, users' interest in value and higher quality phones is increasingly overriding their desire for low prices.

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

Table 1

                        Worldwide End-User Spending by Device Type, 2016-2019 (Millions of Current U.S. Dollars)

Device Type

2016

2017

2018

2019

Traditional PCs (Desk-Based, Ultramobile Premium  and Notebook)

163,906

163,351

166,259

169,192

Mobile Phones

382,859

399,497

408,170

423,558

Ultramobiles (Basic and Utility)

40,436

36,286

35,171

34,411

Total Device Market

587,201

599,134

609,601

627,161

           

Source: Gartner (April 2017)

End-User Spending on Mobile Phones Is Growing

End-user spending on mobile phones is on track to reach nearly $400 billion in 2017, an increase of 4.3 percent from 2016. "The increased ASP for mobile phones was driven by users across the board," said Annette Zimmermann, research vice president at Gartner. "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 Huawei and Oppo. In emerging markets, the majority of users are upgrading to better basic phones as the leap to premium phones remains out of reach for most."

Greater availability of basic phones from Chinese vendors such as Oppo, BBK and Huawei increased the basic-phone ASP by 13.5 percent in 2016. It is on track to rise by 4 percent in 2017. "We expect users to continue to look for higher-value phones this year, which will lead to another rise in ASP," added Mrs. Zimmermann." "The high-end smartphone ASP will continue to soar, given the announcement of the Samsung Galaxy 8 and the release of the tenth-anniversary Apple iPhone later this year. We expect the premium-phone ASP to increase by 4 percent in North America in 2017."

Shipments of PCs, ultramobiles and mobile phones are projected to total 2.3 billion units in 2017 — achieving flat growth from 2016 (see Table 2).

 Table 2

                        Worldwide Device Shipments by Device Type, 2016-2019 (Millions of Units)

Device Type

2016

2017

2018

2019

Traditional PCs (Desk-Based and Notebook)

220

205

196

191

Ultramobiles (Premium)

50

60

72

82

PC Market

270

265

268

273

Ultramobiles (Basic and Utility)

169

161

158

157

Computing Device Market

439

426

426

430

Mobile Phones

1,893

1,910

1,920

1,954

Total Device Market

2,332

2,336

2,346

2,384

Note: The ultramobile (premium) category includes devices such as Microsoft Windows 10 Intel x86 products and the Apple MacBook Air.

The ultramobile (basic and utility) category includes devices such as the Apple iPad and iPad mini, Samsung Galaxy Tab S2, Amazon Fire HD, Lenovo Yoga Tab 3 and Acer Iconia One.

Source: Gartner (April 2017)

Desk-Based and Notebook PC ASP Will Increase by 1.4 Percent in 2017

The PC exodus has reached its peak, but near-term growth of PC sales will be hampered by increasing component costs. Component costs, especially for DRAM, have doubled since June 2016. “As a result, PC providers will increase the prices of PCs toward the end of the year. We expect the overall ASP for PCs to increase by 1.4 percent in current U.S. dollars," said Mr. Atwal.

More detailed analysis is available to clients in the reports "Forecast: PCs, Ultramobiles and Mobile Phones, Worldwide, 2015-2021, 1Q17 Update" and "Gartner Market Databook 1Q17 Update."

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