We’re buying more devices, but spending less on them

The global hunger for devices shows no sign of abating, with 2.4-billion units expected to ship in 2016, a 1.9% increase from 2015. At the same time however, the amount we’re willing to spend on devices is shrinking.

That’s according to technology research house Gartner, which says that end-user spending in constant US dollars is expected to decline 0.5% for the first time in 2016.

One major factor playing a role in the global device market, Gartner says, is country-level economic conditions.

“It’s clear that vendors can no longer market their products with the mind of only targeting the mature and emerging markets,” said Ranjit Atwal, research director at Gartner. “Driven by economic variations the market is splitting into four categories: economically challenged mature markets, economically stable mature markets and the same for emerging markets. Russia and Brazil will fall into the category of economically challenged emerging markets while India will be stable, and Japan will belong to the economically challenged mature market.”

Read more: Gartner: PC shipments slashed, worldwide device shipments set reach 2.5bn in 2015

In terms of different device categories, it looks as if the PC market will get some reprieve in 2017 after one of the sharpest declines ever in 2015, while smartphones are set to increasingly become the norm in the global mobile space.

Businesses Will Adopt Windows 10 Earlier and Boost the PC Market in 2017

The global PC shipment market is expected to total 287 million units in 2016, a decline of one percent year over year, but on pace to increase four percent in 2017.

“Ultramobile premium devices are expected to drive the PC market forward with the move to Windows 10 and PCs built around Intel’s Skylake architecture,” said Atwal. “We expect that businesses will deploy Windows 10 faster than with previous Windows upgrades.” Gartner’s global survey of ,000 business respondents conducted in the fourth quarter of 2015 across six countries (Brazil, China, India, France, UK and US), found that nearly 80% of businesses are expected to have completed the testing and evaluation of Windows 10 within 12 months and over 60 per cent within nine months.

“Given the shorter testing and evaluation period, many businesses could start to migrate by the end of 2016,” said Mr Atwal. “By the end of 2017, many business are looking to move as much as 40 per cent of their installed base onto new Windows 10 devices, mainly driven by the appeal hybrid touch-screen 2-1. This will be the catalyst for growth in the PC market in 2017.

Smartphones become the norm

Mobile phone shipments are on pace to increase 2.6% in 2016. “Constant end-user spending on mobile phones is expected to increase by 1.2 per cent in 2016, but its growth will not be strong enough for overall end-user device spend to achieve growth in 2016,” said Roberta Cozza, research director at Gartner.

Read more: Smartphone shipments grow in Middle East, Africa as affordable devices become popular

Smartphone shipments continued to drive growth, and Gartner estimates that, by the end of 2016, 82% of mobile phones will be smartphones, up 12 per cent from 2015. “We are witnessing a shift to basic phones in the smartphone market,” Cozza said. “Users are also opting to replace within the basic smartphone category without necessarily moving to high-end smartphones, especially in China and some other emerging markets.”

Local and Chinese brands are delivering more capable basic smartphones with appealing features at a lower price, which means that there is less of a need for users to upgrade to a premium smartphone. Instead, these more advanced and attractive basic smartphones fulfil user’s needs at a lower cost.

“At MWC 2016, a number of Android vendors will, as usual, release the next generation of their smartphone flagships,” said Ms Cozza. “We’ll hopefully see an increased focus on differentiation by enabling unique, but relevant experiences, expansion to new functionalities and better tie to key app and service ecosystems.”