A new report by International Data Corporation (IDC) on Friday forecasted estimated figures of consumer spending on technology in 2019 and top emerging technologies based on their five-year compound annual growth between 2018 – 2023.
The report, titled Worldwide Semiannual Connected Consumer Spending Guide, revealed that the amount consumers spend on traditional and emerging technologies will reach $1.69 trillion in 2019, showing a year over year increase of 5.3% as compared to 2018. It also predicted consumer expenditure on technology will be increased with 5.1% compound annual growth rate (CAGR) by 2023, with consumer spending estimated to reach $2.06 trillion.
The data compiled and presented in the Worldwide Semiannual Connected Consumer Spending Guide is collected from various different markets in the context of fixed parameters. These parameters are:
- Regional: The study covers 9 regions, namely, USA; Canada; Japan; Western, Central and Eastern Europe; the Middle East and Africa; Latin America; People’s Republic of China; Asia.
- Technology Groups and categories: Technology is divided into 3 groups – Hardware, telecom services, and services. The hardware consists of items such as AR/VR headsets, smart speakers, drones and robots, phones, tablets, notebooks, home security systems, etc. Telecom services encompass communication through mobile data. Services refer to on-demand subscriptions such as Netflix, Spotify, Amazon Prime, etc.
- Use Cases: Use cases are the situations the concerned technology is used in. Some common use cases are entertainment, augmented/virtual reality games, education, household maintenance and automation, information, personal assistance and wellness, etc.
- Innovation types: The technology could be emerging or traditional.
Consumer Spending On Technology for Different Categories
Traditional technologies will account for three fourth of consumer sending in 2019. About half of this amount will be claimed by telecom services, the remaining will be accounted for by expenditure on mobile phones and personal computing devices.
A 5-year (2018 – 2023) CAGR of emerging technologies will be 13.2%. Thus, the demand for technologies like AR/VR headsets, subscription services, smart home devices, robots, and wearable gadgets will be able to make up about a third of consumer spending by 2023. 90% of this growth will be attributed to on-demand subscriptions and smart home devices like smart speakers, automated lighting, smart TVs, etc.
The report, addressing the overall consumer spending on technology, also highlights that 70% of the total consumer spending will emerge from communication and entertainment use cases. Communication spending will be dominated by traditional voice and messaging service technologies.
Entertainment will mainly take shape in the form of streaming/downloading of videos, tv shows, and movies. In keeping with this, virtual reality video viewing will have a CAGR of 47.3%. Music streaming and online/downloadable game will also be popular. Augmented reality games will absorb the largest chunk of consumer expenditure with an expected CAGR of 136.3%.
Additionally, the top technology categories according to IDC’s data between 2018 and 2023 are AR/VR headsets, drones, robotic systems, on-demand services, and smart wearables.
During the forecast period, the expected CAGR of traditional technologies will be considerably slower in comparison, with a predicted 2.2% increase.
The three largest markets for consumer technology in 2019 are The United States ($412 billion), People’s Republic of China ($382 billion), and Western Europe ($227 billion).
Telephone services and mobile phones will show the highest demand and purchase in all three regional markets.
The spending growth rate in China will be the fastest out of all regions in the forecast period, clocking in at 6.8%.
Developers Looking for Convenience and Functionality
Stacey Soohoo, the research manager of the Consumer Insights & Analysis division at IDC states that technological advances are increasingly becoming more convenient based on consumer needs.
Meanwhile, developers are aiming to find the right balance between “personalization and functionality to provide frictionless experiences,” says Soohoo.