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Worldwide device shipments take a slight dip in 2017

Worldwide device shipments take a slight dip in 2017

But Gartner expects the market to return to growth next year

Worldwide shipments of PCs, tablets and smartphones are expected to exceed 2.3 billion units in 2017, a slight dip of 0.3 per cent from 2016, according to Gartner.

The research firm mentioned that the decrease is a result of new technologies failing to drive current demand, but their impact will be recognised in the long-term.

According to Gartner, the total installed base for these devices – such as artificial intelligence and virtual personal assistants – is currently around seven billion units, so vendors are constantly looking at ways to add new capabilities that can give their products an edge in the market.

But these technologies will grow in adoption throughout the forecast period, yet it is difficult to see any revolutionary impact in early iterations, according to Gartner research director, Ranjit Atwal.

"Today, the user experience with new technologies such as AI and VPAs is too often below the standard found in the rest of the device, and the cost to raise the standard quickly is prohibitive, relative to the benefits," Atwal said.

"In the near term, the device market will continue to be driven by incremental advances in traditional technology, but, looking three or four years ahead, the device market will begin to see very significant shifts in both usage patterns and form factors, especially as 5G wireless technology is introduced."

Source: Gartner
Source: Gartner

However, Gartner mentioned that even though the market has taken a slight dip in 2017, it will return to growth in 2018 with a 1.6 per cent increase in shipments; and the slowing of the PC market decline and strong growth in smartphone shipments are expected to support this.

Gartner found that PC shipments are “on pace” to drop three per cent in 2017, but the rate of decline is slower than in recent years, alleviated by Windows 10 replacement purchasing. It also found that the prices for components such as DRAM memory and SSD hard drives continue to rise, creating headwinds for the global PC market and — to a lesser extent — the smartphone market.

Atwal said the impact of component pricing on PCs is being reduced for buyers as producers absorb some of the cost into their margins, fearing the alternative of a reduction of their share of a competitive market.

"PC buyers continue to put quality and functionality ahead of price. Many organisations are coming to the end of their evaluation periods for Windows 10, and are now increasing the speed at which they adopt new PCs as they see the clear benefits of better security and newer hardware,” Atwal said.

As for the smartphone shipments market, Gartner found that overall shipments will grow five per cent in 2017, reaching nearly 1.6 billion units.

The firm’s research director, Roberta Cozza, added that end-user spending will continue to shift from low-cost "utility" phones toward higher priced "basic" and "premium" smartphones.

She highlighted that the "basic" smartphone market is expected to record 686 million shipments in 2017, up 6.8 per cent from 2016.

"Consumers have already accepted the greater value attained from the better capabilities of basic smartphones, compared to low-end utility devices. Therefore, the average selling prices of mid- and high-range smartphones continue to increase," Cozza said.

"The Chinese players currently pushing basic smartphones with premium feel and features into the market will continue to strengthen the shift away from low-end utility phones toward basic smartphones."

Cozza also added that the smartphone market is now more dependent on new devices that offer something different, as users are extending their purchasing cycles and need to be enticed to make a replacement.

"The Samsung S8 and S8 Plus have had a strong impact so far in 2017, with users undeterred by battery issues that affected the Note 7 at the end of 2016. This good start points to a rebound for Samsung.

"Continued premium smartphone growth in 2017 will also be highly dependent on the forthcoming anniversary edition of Apple's iPhone, which should bring more-drastic feature and design upgrades than the last few iterations,” she added. 

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Tags smartphonesmobile devicesGartnerPC and componentsworldwide device shipments

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