As more digital technology innovations reside in software apps, and part of those software functions reside in a public cloud, the value of device-centric innovation has been eclipsed. Chances are, the device that you already have in your possession is 'good enough' to access those software-defined services.
Worldwide shipments of devices -- personal computers (PCs), media tablets and mobile phones -- will decline by 3.7 percent in 2019, according to the latest worldwide market study by Gartner.
Personal Device Market Development
Gartner estimates there are more than 5 billion mobile phones used around the world. After years of growth, the worldwide smartphone market has reached a tipping point. Sales of smartphones will decline by 3.2 percent in 2019, which would be the worst decline the category has seen.
"This is due to consumers holding onto their phones longer, given the limited attraction of new technology," said Ranjit Atwal, senior research director at Gartner.
The lifetimes of premium smartphones -- for example, Google Android and Apple iOS phones -- continue to extend through 2019. Their quality and technology features have improved significantly and have reached a level today where users see high value in their device beyond a two-year time frame.
Consumers have reached a threshold for new technology and applications: according to the Gartner assessment, unless the devices provide significant new utility, efficiency or experiences, users do not necessarily want to upgrade their smartphones.
That being said, Gartner forecasts the share of 5G-capable phones will increase from 10 percent in 2020 to 56 percent by 2023. "The major players in the mobile phone market will look for 5G connectivity technology to boost replacements of existing 4G phones," said Mr. Atwal.
Still, less than half of communications service providers (CSPs) globally will have launched a commercial 5G network in the next five years. More than a dozen service providers have launched commercial 5G services in a handful of markets so far.
To ensure smartphone sales pick up again, mobile providers are starting to emphasize 5G performance features, like faster speeds, improved network availability and enhanced security. Gartner expects to see 5G phones account for more than half of phone sales in 2023. As a result of the impact of 5G, the smartphone market should return to growth at 2.9 percent in 2020.
Meanwhile, worldwide PC shipments totaled 63 million units and grew 1.5 percent in the second quarter of 2019, yet it's unclear if external economic issues still cast uncertainty over PC demand this year. PC shipments are estimated to total 256 million units in 2019 -- that's a 1.5 percent decline from 2018.
The consumer PC market will decline by 9.8 percent in 2019, reducing its share of the total market to less than 40 percent. The collective increase in consumer PC lifetimes will result in 10 million fewer device replacements through 2023. With the Windows 10 migration peaking, business PCs will decline by 3.9 percent in 2020 after three years of growth.
Outlook for New Personal Device Demand
"There is no doubt the PC landscape is changing," said Mr. Atwal. "The consumer PC market requires high-value products that can meet specific consumer tasks, such as gaming. Likewise, PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions."
Ultimately, the vendors that design new personal devices -- including PCs and smartphones -- must consider evolving their business models to be based more on annual service income, rather than reacting to the annual peaks and troughs of spending on new devices. The 'bright shiny object' era of personal device marketing has lost its luster (with the exception of the most devoted Apple fanboys).
Furthermore, the trend of 'good enough' lower-cost devices having very similar basic specifications as the more higher-cost devices further complicates the marketing challenge for vendors that have struggled to differentiate the expensive devices that offer minimal additional benefits to the user.
Worldwide shipments of devices -- personal computers (PCs), media tablets and mobile phones -- will decline by 3.7 percent in 2019, according to the latest worldwide market study by Gartner.
Personal Device Market Development
Gartner estimates there are more than 5 billion mobile phones used around the world. After years of growth, the worldwide smartphone market has reached a tipping point. Sales of smartphones will decline by 3.2 percent in 2019, which would be the worst decline the category has seen.
"This is due to consumers holding onto their phones longer, given the limited attraction of new technology," said Ranjit Atwal, senior research director at Gartner.
The lifetimes of premium smartphones -- for example, Google Android and Apple iOS phones -- continue to extend through 2019. Their quality and technology features have improved significantly and have reached a level today where users see high value in their device beyond a two-year time frame.
Consumers have reached a threshold for new technology and applications: according to the Gartner assessment, unless the devices provide significant new utility, efficiency or experiences, users do not necessarily want to upgrade their smartphones.
That being said, Gartner forecasts the share of 5G-capable phones will increase from 10 percent in 2020 to 56 percent by 2023. "The major players in the mobile phone market will look for 5G connectivity technology to boost replacements of existing 4G phones," said Mr. Atwal.
Still, less than half of communications service providers (CSPs) globally will have launched a commercial 5G network in the next five years. More than a dozen service providers have launched commercial 5G services in a handful of markets so far.
To ensure smartphone sales pick up again, mobile providers are starting to emphasize 5G performance features, like faster speeds, improved network availability and enhanced security. Gartner expects to see 5G phones account for more than half of phone sales in 2023. As a result of the impact of 5G, the smartphone market should return to growth at 2.9 percent in 2020.
Meanwhile, worldwide PC shipments totaled 63 million units and grew 1.5 percent in the second quarter of 2019, yet it's unclear if external economic issues still cast uncertainty over PC demand this year. PC shipments are estimated to total 256 million units in 2019 -- that's a 1.5 percent decline from 2018.
The consumer PC market will decline by 9.8 percent in 2019, reducing its share of the total market to less than 40 percent. The collective increase in consumer PC lifetimes will result in 10 million fewer device replacements through 2023. With the Windows 10 migration peaking, business PCs will decline by 3.9 percent in 2020 after three years of growth.
Outlook for New Personal Device Demand
"There is no doubt the PC landscape is changing," said Mr. Atwal. "The consumer PC market requires high-value products that can meet specific consumer tasks, such as gaming. Likewise, PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions."
Ultimately, the vendors that design new personal devices -- including PCs and smartphones -- must consider evolving their business models to be based more on annual service income, rather than reacting to the annual peaks and troughs of spending on new devices. The 'bright shiny object' era of personal device marketing has lost its luster (with the exception of the most devoted Apple fanboys).
Furthermore, the trend of 'good enough' lower-cost devices having very similar basic specifications as the more higher-cost devices further complicates the marketing challenge for vendors that have struggled to differentiate the expensive devices that offer minimal additional benefits to the user.