Worldwide device shipments to decline 0.3 percent this year: Gartner

Worldwide shipments of smartphones, tablets and PCs will decline marginally in 2017, states Gartner in a new report. The drop would be about 0.3 percent and shipments will reach 2.3 billion units globally. However, the devices market is expected to grow by 1.6 percent in 2018.

“Overall, the shipment growth of the device market is steady for the first time in many years,” said Ranjit Atwal, research director at Gartner. “PC shipments are slightly lower while smartphone shipments are slightly higher — leading to a slight downward revision in shipments from the previous forecast,” he added.

PCs are slightly back in favor as Windows 10 replacement buying has ensured that the rate of decline in PC shipments has dropped to 3 percent. However, PCs as a category continues to decline as smartphone adoption increases. Prohibitive pricing of PC components is also slowing the category down. “Prices for components such as DRAM memory and SSD hard drives continue to rise, creating headwinds for the global PC market,” the Garter report stated.

But buyers continue to value ”quality” and “functionality” ahead of price. “Many organizations 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,” says Gartner’s Atwal. While PC shipments are declining, albeit slowly, smartphones are growing as a category. Gartner estimates that shipments will grow 5 percent reaching nearly 1.6 billion units at the end of 2017.

Users are moving towards more sophisticated handsets beyond mere utilities for want of a better and premium experience. Therefore, the average selling prices of mid- and high-range smartphones continue to increase. Gartner observes that the ‘premium’ category has got a face-lift from the success of the Samsung S8 and S8 Plus which has helped the Korean phonemaker “rebound” as well. “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,” says Roberta Cozza, Research Director at Gartner.

Users are keen to invest in innovation and differentiation. And the smartphone market is relying on new devices that offer something different as users are now extending their purchasing cycles and need a strong device to attract them. ”Continued premium smartphone growth in 2017 will 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,” adds Cozza. Apple is expected to have features like machine learning abilities and augmented reality in the next iPhone.

New technologies though have failed to increase demand so far. New tech such as artificial intelligence (AI) and virtual personal assistants (VPAs) will, of course, grow in adoption throughout the forecast period, but it is difficult to see any revolutionary impact in early iterations, observes Gartner. “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,” says Atwal.

In the near-term, the device market will show only incremental growth. However, with the advent of 5G technology and newer form factors, usage patterns are expected to evolve, thus leading to a significant shift in the industry after three years or so.