Asia drags down global mobile, PC markets

2016-01-21 14:33 - Duncan Alfreds, Fin24
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Smartphones. (Duncan Alfreds, Fin24)

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Cape Town – Slow growth is forecast for the mobile devices and PC market as market conditions in Asia drags down expectations.

According Gartner, worldwide shipments of devices such as PCs, tablets and smartphones will reach 2.4 billion units in 2016, an increase of 1.9% over 2015.

But the varying economic conditions of the market means that manufactures cannot simply push product and enjoy success.

The Chinese economy grew at 6.9% in the fourth quarter of 2015, the lowest result in 25 years, the Wall Street Journal reported on Tuesday.

"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,” said Ranjit Atwal, research director at Gartner.

Preliminary results from International Data Corporation for the Asia/Pacific region showed that PCs fell 8% in 2014 and the outlook remained bleak.

“Year 2016 is expected to remain difficult for the industry, as current gloomy economic outlook, with uncertainty in the financial markets in China affecting multiple countries will likely weigh on IT spending in the near future”, said Maciek Gornicki, research manager for Client Devices Research at IDC Asia/Pacific.

Bad news

READ: Android overtakes Windows as world goes mobile

“Constant end-user spending on mobile phones is expected to increase by 1.2% 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.

Data from the company shows that by the end of 2018, mobile phones will top two billion, far more than PCs (311 million) and tablets (198 million).

But there is bad news for premium smartphone manufacturers.

“We are witnessing a shift to basic phones in the smartphone market. 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,” said Cozza.

READ: Cheap devices, Africa to drive global smartphone growth

While Android is the dominant mobile platform, some manufactures have opted for unique versions of the software, especially around user experience and security.

BlackBerry’s upcoming Priv has a strong focus on privacy while Xiaomi has its MIUI operating system based on Android. Android leader Samsung has developed its rival Tizen operating system.

Cozza said that manufactures will likely tie customers into ecosystems with software that creates a unique user experience.

“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.”


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