Users of personal computers, ultramobiles (which includes iPads, tablets and Chromebooks) and mobile phones are buying new devices at higher average selling prices (ASPs), resulting in growth in end-user spending in 2017. The Gartner research group estimates that end-user spending will increase by 2% in 2017, to nearly $600 billion in current U.S. dollars.
Spending on mobile phones will represent 67% of that figure. Gartner estimates that ASPs for computing devices and mobile phones will increase by 2%for two main reasons. First, component price increases are continuing into 2017 (mainly for personal computers but also to some extent for phones), which is resulting in more expensive products. Second, users’ interest in value and higher quality phones is increasingly overriding their desire for low prices.
“Across the world, the device market is becoming less price-sensitive,” says Ranjit Atwal, research director at Gartner. “Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products.”
End-user spending on mobile phones is on track to reach nearly $400 billion in 2017, an increase of 4.3% from 2016.
“The increased ASP for mobile phones was driven by users across the board,” says Annette Zimmermann, research vice president at Gartner. “They are replacing their basic phones with better-quality and more feature-rich basic phones, due to improved product portfolios from rising vendors such as Huawei and Oppo. In emerging markets, the majority of users are upgrading to better basic phones as the leap to premium phones remains out of reach for most.”
Greater availability of basic phones from Chinese vendors such as Oppo, BBK and Huawei increased the basic-phone ASP by 13.5% in 2016. It is on track to rise by 4% in 2017.
“We expect users to continue to look for higher-value phones this year, which will lead to another rise in ASP,” says Zimmermann. ”The high-end smartphone ASP will continue to soar, given the announcement of the Samsung Galaxy 8 and the release of the tenth-anniversary Apple iPhone later this year. We expect the premium-phone ASP to increase by 4% in North America in 2017.”
