Sales of smart devices to grow by 14 percent: report

By Kevin Chen  /  Staff reporter

Mon, Oct 01, 2012 - Page 13

Global shipments of so-called smart connected devices — including PCs, smartphones and tablets — are expected to grow by a compound annual growth rate of 14 percent over the next four years to top 2 billion units in 2016, a global market researcher said in a report last week.

The International Data Corp (IDC) said the projected robust increase in demand of smart connected devices, fueled mainly by smartphones and tablets, indicated the world has entered into a new era where individuals are using multiple devices to access mobile content.

“The recent shipment data clearly demonstrates that we have fully entered into the multi-device era, where individuals are buying and using multiple devices per person, most often with different combinations of operating systems,” IDC vice president Bob O’Donnell said in a statement on Wednesday.

“The implications of this development on application developers, device makers, Web service providers, businesses and even individuals is profound,” he said.

Based on IDC’s statistics, combined shipments of PCs, smartphones and tablets reached 267.3 million units in the second quarter of this year, up 27.4 percent year-on-year and 2.8 percent quarter-on-quarter.

In terms of revenue, these smart connected devices generated a total of US$131.5 billion in sales worldwide in the second quarter, which represented a 16.3 percent increase from a year earlier, but a 2.7 percent decline from the previous quarter, the IDC report said.

For this year, combined shipments of smart connected devices are projected to increase 27.4 percent to nearly 1.2 billion units from last year, and the figure is expected to grow 19.2 percent further next year to 1.4 billion units and surpass 2 billion units in 2016, according to IDC’s estimate.

However, a breakdown of the smart connected devices showed that both smartphones and tablets are expected to see shipments continue to increase over the next four years at the expense of a decline in PC shipments.

Smartphones, for instance, are projected to see shipments increase by nearly 15.8 percent annually over the next four years to account for 63 percent of smart connected device shipments in 2016, from more than 59 percent this year. Meanwhile, tablets are to see the fastest growth, rising from about 10 percent share this year to 13 percent by 2016, reducing the PC share to 24 percent from 31 percent within four years, IDC said.

Other market analysts have also noted the scenario in which tablets start replacing consumer notebook computers. They said the Microsoft Corp’s upcoming Windows 8-based tablet — known as Surface — might accelerate this demand substitution.

JPMorgan said in a separate report on Wednesday that Microsoft’s push into the tablet market with the Windows 8 operating system could pave the way for the substitution of notebooks with tablets/hybrids in the consumer PC sector.

“Already, most of the growth in mobile devices is coming from tablets since the launch of iPad, while in developed markets, consumer notebook units have already started declining,” JPMorgan analysts led by Gokul Hariharan wrote in the report. “If the Windows platform also starts supporting tablet users, then we may see the faster substitution of notebooks with tablets and hybrids.”

JPMorgan said this scenario would pose a challenge for companies in the PC supply chain in the Greater China region, with PC brands and component vendors such as those supplying processors, hard-disc drives, DRAM, optical disks and power adapters suffering the most.

Contract PC makers will be more resilient than other supply-chain firms, while touch panel, NAND and battery pack vendors are likely to be the only beneficiaries in this scenario, the JPMorgan report said.