Gartner predicts a 0.3% decline in global device shipments in 2017.
Rising memory and hard drive component prices are impacting PC market growth.

Gartner, an IT advisory firm, forecasts that global shipments of all devices (PCs, tablets, ultramobiles, and mobile phones) will reach 2.3 billion units in 2017, a 0.3% year-over-year decline. However, it added that growth is expected to recover in 2018, rising 1.6%.

PC shipments declined 3% in 2017, but the decline slowed compared to recent years, fueled by Windows 10 replacement demand. The steadily rising prices of components such as DRAM memory and SSD hard drives are exerting a negative impact on the global PC and smartphone markets. PC component manufacturers, concerned about losing market share in this highly competitive market, are absorbing some of the costs into profits, reducing the impact of PC component prices on consumers.

"PC shipments are slightly down, while smartphone shipments are slightly up, leading to a slight downward revision to last year's shipment forecast," said Ranjit Atwal, research director at Gartner. "PC buyers are prioritizing product quality and features over price. “Many businesses are approaching the end of their Windows 10 trial periods, and are rushing to purchase new PCs as they see the benefits of stronger security and new hardware,” he analyzed.

Total smartphone shipments in 2017 are projected to reach 1.6 billion units, a 5% increase over the previous year. End-user spending trends continue to shift from traditional low-cost "utility" phones to higher-priced "basic" or "premium" smartphones. With longer purchase cycles and a growing need to encourage replacement with new products, market growth appears increasingly dependent on new devices offering something different.


“Despite the battery issues with the Galaxy Note 7 late last year, Samsung has performed very well this year with the Samsung S8 and S8 Plus,” said Roberta Cozza, research director at Gartner. “This is a good sign that Samsung is rebounding. Growth in premium smartphones in 2017 will largely depend on Apple’s upcoming iPhone 8, which will celebrate its 10th anniversary with a host of new features and design enhancements. Apple’s recent announcements suggest new technologies and functional improvements, including augmented reality and enhanced machine learning.”

Basic smartphone shipments in 2017 are expected to reach 608.6 million units, a 6.8% increase year-on-year. "Consumers already recognize the value of basic smartphones with better features compared to low-priced utility devices, so the average selling price of mid- to high-end smartphones will continue to rise," said Roberta Cozza, senior research analyst. "The recent introduction of basic smartphones with premium feel and features by Chinese companies will further accelerate the shift of consumers away from low-priced utility phones."

With the total installed base of devices reaching approximately 7 billion, companies are exploring ways to add new features to their products to gain a competitive edge in the market. While the adoption of various new technologies, such as artificial intelligence (AI) and virtual personal assistants (VPAs), is expected to increase, it is unlikely to have a revolutionary impact in the early stages. However, the report also predicts that within the next three to four years, significant changes in usage patterns and form factors, such as the introduction of 5G wireless technology, will occur.