Consumer spending to fuel tech industry growth: Gartner
By Edwin Yapp March 27, 2013
- Consumers increasingly a target for vendors and service providers as technology advances
- Mobility continues to grow; CIOs must gear up on knowledge or risk losing out to competitors
CONSUMERS are increasingly becoming the center of the technology battlefield, where vendors and service providers are expected to vie for their buying attention and their power to spend, according to analyst firm Gartner.
Andrew Chetham (pic), managing vice president of Gartner, noted that consumer spending on information technology and digital content will outstrip overall IT spending as these sectors are expected to grow 5% a year on average versus the overall IT market of around 2%, through to 2016.
“Consumer spending will fuel technology growth and the average consumer spending per person worldwide will show robust growth,” he said at a recent Gartner briefing to vendors in Kuala Lumpur. “By 2016, the average spend per person will be US$361 per year worldwide, up from US$302 in 2012 – about a 20% increase over four years.”
In tandem with this growth, several other trends are also expected to affect the market as we know it, according to Gartner’s research.
These include the latent collapse of the personal computer (PC) installed base, which will hurt PC vendors, and the notion that emerging markets are defined not by geography anymore but by demographics instead, Chetham said.
“In the next few years, the highest growth area will be the media and content space which is expected to grow by about 9% a year until 2016, while the highest growth segment is expected to be apps, which is predicted to record revenues of US$60 billion in 2016.”
Besides these predictions in the coming years, he also noted that the next few years would see technology altering user behavior. Consumers, he added, are now defined by technology and as such digital skills and tools are no longer optional but necessary for both personal and business interactions.
In fact, Chetham believes trends such as the personal cloud and applications will dominate the marketplace, as consumers will expect any content to be available on any device.
“A screen is just a screen, and size will be the differentiator. As public consumer sharing declines, private sharing is expected to grow," he said. “Also, by 2016, the use of mobile apps will surpass that of Internet domain names, and will be the dominant means of engaging with brands.
“During the next four years, apps will start delivering everything from biometric information to entertainment, marketing campaigns and payment facilities.”
According to Annette Jump (pic), research director at Gartner, mobility will become even more pervasive in both the consumer and enterprise space in the next four years.
Speaking at the same briefing, she noted that smartphones will make up 52% of total global handset shipments by the end of 2013 and this figure is expected to increase to 78% by 2016.
Mobile PC and tablet shipments – comprising ultra mobile devices, laptops and notebooks, premium tablets and low-end tablets – from 2013 to 2016 is expected to reach just over 600 million units shipped, she added.
From a technology perspective, Jump noted that the distinction between the smartphone and the feature phone will further blur
“We will begin to see 8-core processors in these devices, curved screens and flexible organic LED (OLED) screens emerge slowly, and the user interface for these devices will get more sophisticated.”
More importantly, she said that mobility is helping companies grow their business and transform it, and chief information officers (CIOs) are beginning to pay very close attention to it.
“According to a poll we recently conducted of 2,000 CIOs in 41 countries, we found out that mobile technology was their No 2 priority in 2012 and 2013,” she said. “Mobility is close to the heart of companies today and in fact more (of the) IT budget is being diverted to it.”
Jump cited two reasons for this, the first being the pace of innovation in mobility. “Because so many new developments are taking place in this space, CIOs need to understand and ensure that they and their people have the right skills to bring these technologies into their companies.
“The second is that mobility enables business innovation for companies and enables them to look for new revenues within their business,” she said.
Jump also said that in the coming years, mobility will become so prevalent that by 2016, close to 40% of enterprises surveyed are going to be purely mobile only and will completely move away from PCs.
“In tandem with this, 30% of enterprise will stop providing personal technology devices to their staff, primarily in the smartphone and tablets area, but laptops too.”
Jump said that it’s important for service providers to take note of these developments and prepare for the eventual disruptive era in the coming years.
“For telecommunication service providers, find opportunities beyond your traditional device segment and be prepared for market volatility and remain flexible as the device market and ecosystem mature in the next two to three years,” she said. “Create new methodologies to better understand consumers and realize that effective branding and marketing will be as important as technology.
For the enterprise segment, find innovative ways to use mobile devices, apps and services. “Continue using mobility and applications to transform your business so that you can get ahead of competition. Finally, keep reviewing your mobile strategy as it is a process not a document.”
Gartner’s Top 10 strategic tech trends for 2013