NEW YORK: Driven by emerging technologies including AR/VR headsets, drones, on-demand services, robotic systems, smart home devices and wearables, consumer spending on technology is forecast to reach $1.69 trillion globally in 2019 — an increase of 5.3 per cent over 2018, an International Data Corporation (IDC) report has said.
Consumer purchases of traditional and emerging technologies will remain strong over the 2019-2023 forecast period, reaching $2.06 trillion in 2023 with a five-year compound annual growth rate (CAGR) of 5.1 per cent.
Roughly three quarters of all consumer technology spending in 2019 will be for traditional technologies.
Mobile telecom services (voice and data) will account for more than half of this amount throughout the forecast, followed by mobile phones and personal computing devices. Spending growth for traditional technologies will be relatively slow with a CAGR of 2.2 per cent over the forecast period, the report noted.
“Ranging from consumer robots for household cleaning and maintenance to smart lighting or home security/monitoring systems, connected consumers are adopting these solutions in their homes and everyday lives as they go through their own digital transformation,” said Stacey Soohoo, research manager with IDC’s Customer Insights and Analysis group.
The US will be the largest geographic market with consumer technology spending forecast to reach $412 billion in 2019.
China will be the second largest market in 2019 with spending expected to reach $328 billion, followed by Western Europe at $227 billion.
Emerging technologies will deliver strong growth with a five-year CAGR of 13.2 per cent.
This growth will enable emerging technologies to capture nearly a third of consumer spending by 2023. Smart home devices and on-demand services will account for roughly 90 per cent of emerging technologies spending.
“Companies are exploring new opportunities to interact with their consumers, finding the right mix of personalization and functionality to provide frictionless experiences,” Soohoo added.
On-demand services enable access to networks, marketplaces, content and other resources in the form of subscription-based services and includes services like Netflix, Hulu, Spotify and others.
Communication and entertainment will be the two largest use case categories for consumer technology, representing more than 70 per cent of all spending throughout the forecast.
“Entertainment spending will be dominated by watching or downloading TV, videos and movies, as well as listening to music and downloading and playing online games. The use cases that will see the fastest spending growth over the forecast period are augmented reality games (136.3 per cent CAGR) and virtual reality video/feature viewing (47.3 per cent CAGR),” the findings showed.