IT Devices Spending To Bounce Back, Say Experts

by CXOtoday News Desk    Jan 06, 2014

device

After a relatively flat 2013, experts believe that global IT spending will grow somewhat positively and it is especially the device segment which will rebound in 2014. According to Gartner, global IT spending will grow by 3.1% this year to touch $3.7 trillion.

This is 0.5% cut in its overall global IT growth forecast from the previous 3.6%, which the research firm has issued last quarter. Gartner pruned its growth outlook for telecoms services spending, from 1.9 to 1.2%, a segment that represents 40% of the total market, and also for its datacenter systems from 2.9 to 2.6% as it reduced its forecast for external controller-based storage and enterprise communications applications.

However, spending on devices including PCs, ultramobiles, mobile phones and tablets, which dipped by 1.2% in 2013 is set to bounce by 4.3% in 2014 to $697 billion, says Gartner with the evolution of cheaper devices to be launched this year and also increased consumer demand.

Meanwhile enterprise software spending, driven by CRM and SCM is set to grow by 6.8% to $320bn in 2014, as against a 5% growth in 2013, and IT services spending will grow 4.5% to $922bn, with the rise of cloud based services.

Convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, will take place as differentiation will soon be based primarily on price instead of devices’ orientation to specific tasks.
-Richard Gordon, Managing VP at Gartner.

A recent report by the Consumer Electronics Association (CEA) also emphasized that the Lower priced smartphones and tablets are the key drivers of higher sales in emerging markets, which will account for 42% of global tablet sales and 70% of global smartphones sales in 2014.

Unlike Gartner which predicted a moderate growth in certain pockets, CEA however predicted that global technology spending will dip 1% to $1.055 billion in 2014 with lower priced smartphones and tablets increasing consumer demand. The focus in the next one year will be emerging markets of Asia, Africa and Middle-East. The situation will be better in 2015, says the report.

A Forrester study has also predicted that global technology market will not see strong growth in at least next year, despite its forecast remained optimistic about the coming 12 months. In its ‘A Better But Still Subpar Global Tech Market in 2014 and 2015 report, Forrester said that enterprise IT will grow 6.2% annually, and by 5.5% in constant currency over the same period. The research takes into account sales of computer equipment, software, IT consulting, services and outsourcing, but does not consider telecoms in its analysis.

Andrew Bartels, Forrester’s principal analyst predicted that the US will lead other regions in IT purchasing, with the Western Europe region only just recovering from its debt crisis and even traditionally fast-growing countries Brazil, China, India and Russia suffering sluggish and uneven growth. He too pins much hope on the device segment stating that tablets will post strong growth and to an extent the laptops and other PCs will see a modest recovery this year.