New International Data Corporation, IDC, spending guide forecasts, show that consumer spending on technology could hit $1.32 trillion in 2019.
The figure, according to the report indicates an increase of 3.5 per cent over 2018.
It says consumer purchases of traditional and emerging technologies will remain strong over the 2018-2022 forecast period, reaching $1.43 trillion in 2022 with a five-year compound annual growth rate, CAGR of 3.0 per cent.
IDC’s group Vice-President for Devices and Consumer Research, Tom Mainelli, said: “The new Connected Consumer Spending Guide leverages IDC’s long history of capturing consumer device shipments, combined with valuable insights from regular consumer surveys and channel discussions, to tell a comprehensive story about consumer spending.
“The Connected Consumer Spending Guide team has built out an initial set of consumer-focused use cases designed to deliver insights about spending across a wide range of device types, from smartphones to tablets, PCs to drones, and smart speakers to wearables. Over time, the team will continue to develop an ever-widening array of use cases, adding additional data about software and services, and eventually demographic-focused insights.”
He also revealed that traditional technologies, personal computing devices, mobile phones, and mobile telecom services will account for more than 96 per cent of all consumer spending in 2019, while mobile telecom services will represent more than half of this amount, followed by mobile phones.
However, the study shows that spending growth for traditional technologies will be relatively slow with a CAGR of 2.4 per cent over the forecast period.
In contrast, emerging technologies, including AR/VR headsets, drones, robotic systems, smart home devices, and wearables, will deliver strong growth with a five-year CAGR of 20.6 per cent. By 2022, IDC expects more than five per cent of all consumer-spending will be for these emerging technologies.
Smart home devices and smart wearables will account for more than 80 per cent of the overall spending on emerging technologies in 2019. Smart home devices will also be the fastest growing technology category with a five-year CAGR of 38.0 per cent.
Program Vice-President, Customer Insights and Analysis at IDC, Jessica Goepfert, said: “Connected technologies are transforming consumers’ activities and habits, becoming more and more integrated into their daily lives. This is fuelling the consumer’s unquenchable thirst for content and immersive experiences delivered anytime, anywhere, via multiple formats and across a myriad of channels. As a result, we see the balance of power shifting in consumer-facing industries. Whereas once upon a time, the enterprise called the shots, more and more consumer demands and expectations are propelling innovation.
“What’s the next wave of consumer transformation? Even more widely adopted and mature activities such as listening to music and shopping are being disrupted by new technologies such as smart speakers. And disruption presents opportunity.”
She added that communication within the period under review will be the largest category of use cases for consumer technology, representing nearly half of all spending, will go toward traditional voice and messaging services, joined by social networking and video chat as notable use cases within this category. Whereas, entertainment will be the second largest category, accounting for nearly a quarter of all spending as consumers listen to music, edit and share photos and videos, download and play online games, and watch TV, videos, and movies.
The use cases that will see the fastest spending growth over the forecast period are augmented reality games (82.9% CAGR) and home automation (59.8% CAGR).
“There’s an expectation among today’s consumers for a seamless consumer experience. The connected consumer is no longer a passive one; the connected business buyer is in control and it’s essential for technology providers to understand this if they want to continue to grow and gain market share in this digital age. As technology becomes more affordable and accessible, the connected consumer is expected to spend more as they leverage these platforms for entertainment, education, social networking, commerce, and other purposes. IDC’s Worldwide Semiannual Connected Consumer Spending Guide presents a comprehensive view of the consumer ecosystem and serves as a framework for how IDC organizes its consumer research and forecasts,” said Stacey Soohoo, research manager with IDC’s Customer Insights & Analysis group.