Smartphones And Tablets To Control 87% Of Smart Connected Devices By 2017 [STUDY]

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The ever-growing smart devices’ market is undergoing yet another change lately. Earlier this year, we saw a plethora of devices, notably, the 5+ inch smartphones, also known as phablets launched by various manufacturers that have been instrumental in bringing about this change. International Data Corporation (IDC) has recently forecasted that the worldwide smart-devices market, comprised of PCs, tablets, and smartphones, will grow by 27.8% year-over-year (YoY) in 2013, slightly lower than the 30.3% growth in 2012. The PC segment witnessed a tragic decline in sales earlier this year (second quarter, 2013), selling only 76.3 million units worldwide while the tablet segment showed an impressive 42.9% growth and is expected to surpass total PC shipments (desktop as well as laptop PCs) in the fourth quarter of 2013 (4Q13). Although the total PC shipments for the full year are still likely to be greater than the total tablet shipments, but by the year 2015, tablet shipments will surpass total PC shipments on an annual basis, forecasts IDC.

Smart Connected Devices 2013-2017

Worldwide shipment value is expected to grow by 10.6% in 2013 owing to the recent introduction of smartphones and tablets in the low-cost segment that has greatly influenced the smart devices market lately. The worldwide smart device value is expected to be $662.4 billion in 2013, of which $423.1 billion will come from sub-$350 smartphone and tablets segments collectively. These lower-cost devices are expected to drive interest worldwide, especially in developing nations and among first-time buyers, and also in commercial sectors like education. This recent trend suggests that the smart connected device space will continue to surge, with overall shipments surpassing 2 billion units by the end of 2015 with a market value of $735.1 billion. In 2012, total PC shipments accounted for 28.7% of the overall smart device market, while tablets and smartphones accounted for 11.8% and 59.5%, respectively. The total PC segment is expected to drop to 13% by 2017, while tablets and smartphones will contribute to 16.5% and 70.5% respectively to the overall market. The average selling price for the collective market is expected to fall from $462 in 2012 to $323 in 2017, owing to the gradual shift in demand from more expensive PC category to more reasonably priced smartphones and tablets.

“At a time when the smartphone and tablet markets are showing early signs of saturation, the emergence of lower-priced devices will be a game-changer. Introducing new handsets and tablet devices at cheaper price points along with special initiatives like trade-in programs from Apple and BestBuy will accelerate the upgrade cycle and expand the total addressable market overnight.”: Megha Saini, Research Analyst with IDC’s Worldwide Quarterly Smart Connected Device Tracker

It was also noteworthy from IDC’s forecast that a new round of device cannibalizing is expected to kick in. The line between smartphones and tablets is increasingly getting blurred with the introduction of 5+ inch large-screen smartphones, also known as phablets which are already beginning to impact the smaller (7-8 inch) tablet market. The growing popularity of phablets world-wide and the introduction of low-cost phablets in developing economies by local and Chinese vendors is likely eat into the tablet market share.

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“The device world has seen several iterations of cannibalization impacting different categories, with the last few years focused on tablets cannibalizing PC sales. Over the next 12-18 months, however, we believe the larger smartphones, commonly called ‘phablets’, will start to eat into the smaller-size tablet market, contributing to a slower growth rate for tablets.” : Bob O’Donnell, Program Vice President, Clients and Displays.

Source: IDC

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