A recent press release by IT industry watcher International Data Corporation (IDC) has indicated that the outlook for PC shipments has been lowered by 10% for 2013. While this might seem like a significant development, the twist is that the forecasted growth for “smart connected devices,” which also includes smart phones and tablets, is expected to grow 27.8% year over year in 2013.
This is important information for the colocation data center industry since smart connected devices represent the ever-evolving way in which device users are connecting and utilizing the internet and overall communications infrastructure. As WiredRE has espoused before, the growth of the data center market and colocation market is in large degree a function of how internet consumers utilize their devices to communicate globally.
The IDC news that PC shipments are lower is a reflection of how consumers are adjusting their communication and application use requirements to technologies that are more user friendly. The migration to portable computing technologies had been a trend that began almost 30 years ago with the advent of portable computing technologies, but has in recent history accelerated as computing technologies have miniaturized and become more affordable.
The miniaturization and portability of devices has led to the adoption of smart phones and most recently tablets. While the first iPad itself was originally stereotyped as simply a huge smart phone, consumers and business users alike have discovered and embraced its usability and simplicity as a device for everyday use as well as for productivity enhancing business applications.
IDC “expects tablet shipments to surpass total PC shipments (desktop plus portable PCs) in the fourth quarter of 2013 (4Q13). PCs shipments are still expected to be greater than tablet shipments for the full year, but IDC forecasts tablet shipments will surpass total PC shipments on an annual basis by the end of 2015. Smartphones will continue to ship in high volumes, surpassing 1.4 billion units in 2015 and accounting for 69% of all smart connected device shipments worldwide.”
IDC also indicates that worldwide smart connected device value is expected to be $622.4 billion in 2013, of which $423.1 billion will come from the sub-$350 smartphone and sub-$350 tablet segments collectively.
The worldwide smart connected device space will continue to surge, with overall shipments surpassing 2 billion units by the end of 2015 with a market value of $735.1 billion. In terms of device mix, total PC shipments accounted for 28.7% of the smart connected device market in 2012 while tablets accounted for 11.8% and smartphones for 59.5%. By 2017, total PCs are expected to drop to 13%, while tablets and smartphones will contribute 16.5% and 70.5% respectively to the overall market. The shift in demand from the more expensive PC category to more reasonably priced smartphones and tablets will drive the average selling price (ASP) for the collective market from $462 in 2012 to $323 in 2017.
At WiredRE we find this development exciting as it supports overall industry assessment of the growth of communications traffic that inherently leads to the necessity of robust IT colocation data center infrastructure.
For questions about this report contact Alan Howard at ahoward (at) wiredre.com.