Why we’re spending more on computers and phones

Angus Kidman 10 April 2017

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Sales are static but we'll pay more when we do want to buy, Gartner stats show.

Traditional back-of-the-envelope gadget economics works like this: prices remain largely the same, but you get more bang for your buck for the same amount. However, as we fully enter the era in which the most important device is your phone rather than your computer, that trend is beginning to change.

Analysis by Gartner suggests that the average price for computing devices (both phones and computers) will rise by 2% in 2017 (as measured in current US dollars). Total spending this year will be just under US$600 billion. Here's the projected spending across the major categories over four years, showing growth for phones and computers but a decline for cheaper ultramobiles (lower-spec computers and tablets):

So what's going on? "Across the world, the device market is becoming less price-sensitive," Gartner's research director Ranjit Atwal said in a statement. "Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products." A secondary factor is that component prices in many areas are rising, forcing manufacturers to lift prices even in a highly competitive market.

That's happening in parallel with the familiar trend of sales for PCs and ultramobiles slowing down. Many of us are locked in a cycle where we replace our phone every two years, but hang onto our laptops and tablets until they cark it. The table below shows predicted sales across PCs, ultramobiles and phones. As usual, it's the phones that dominate. (These figures are very slightly adjusted from the ones Gartner announced in January, but demonstrate the same basic trend as previous predictions.)

Device type (millions)2016201720182019
Traditional PCs (desk-based and notebook)220205196191
Ultramobiles (premium)50607282
Ultramobiles (basic and utility)169161158157
Computing device market439426426430
Mobile phones1,8931,9101,9201,954
Total device market2,3322,3362,3462,384

As a shopper, it makes sense to buy the best gadget you can afford at the time, since you'll be living with it for several years. There will always be a space for super-cheap devices, but that's not the biggest market trend right now.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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