IDC: Smartphones to dominate connected device future

Smartphones will make up the 'overwhelming majority' of total smart connected devices shipped by 2019, dwarfing both tablets and PCs, according to a new forecast from IDC.

The analyst firm expects the combined total market of smartphones, tablets, 2-in-1s and PCs to grow from 1.8 billion units in 2014 to 2.5 billion in 2019.

IDC's Worldwide Quarterly Smart Connected Device Tracker says smartphones will make up 77.7% of the market by 2019, experiencing a compound annual growth rate of 8.5% in the five years to 2019.

That growth rate is a reduction from last year's year-on-year growth of 27.7%, which took smartphones to 70.7% market share, but will still see 1.9 billion smartphones shipped in 2019, up from 2014's 1.3 billion.

Tom Mainelli, IDC programme vice president for devices, says for more people in more places, the smartphone is the clear choice in terms of owning one connected device.

 Despite slowing growth for smartphones later in the forecast he says it's not likely that anything – including wearables – will unseat smartphones from this dominant position anytime soon.

Tablets and 2-in-1s take second slot, with a prediction of 269 million shipments in 2019, up from 229.7 million last year. IDC predicts this segment will see 3.2% CAGR and account for 10.7% of the market share, compared to 12.5% in 2014.

Portable PCs are expected to experience -0.4% CAGR to 2019 to take out 6.8% of market share, but will still see some 170.4 million shipments in 2019, down from 174.3 million, and 9.5% market share, in 2014.

Desktop PCs, meanwhile, continue their slow decline, with predicted CAGR of 2.0% to ship 121.0 million in 2019, down from 133.8 million in 2014. That will give them a 4.8% share of the overall smart connected devices market – down from 7.3% in 2014.

The combined PC market represented 16.8% of the market in 2014. By 2019, that will drop to just 11.6% share.

Mainelli says smartphone growth continues at 'an astounding pace' while growth in the PC and tablet markets is proving to be more challenging.

 "There are clearly some bright spots in both markets: Detachable 2-in-1s show strong growth potential in tablets, and convertible notebooks are beginning to gain traction in PCs.

Meanwhile, Melissa Chau, IDC senior research manager for mobile devices, says not all smartphone growth will be equal, with the future lying in emerging markets, sub-US$100 price points and phablets.

"So far the market has very much focused on premium models and brands, but emerging market consumers are looking for greater value from a single device," Chau says.

She says last year 73% of smartphones were shipped to emerging markets, 21% were priced below US$100 and 12% had screen sizes between 5.5 and less than 7-inches.

"By 2019, these categories will all increase: 80% of smartphones will be shipped to emerging markets, 35% will be priced below US$100 and 32% will have a 5.5 to less than 7-inch screen size.

As recently as 2010, PCs still made up the lion's share of the total smart connected device market, with the combined desktop and notebook categories accounting for about 52.5% of shipments, versus 44.7% for smartphones and 2.8% for tablets.

By 2014, smartphones had grown to represent 73.4% of total shipment, while PCs had slipped to 16.8% and tablets had increased to 12.5%. By 2019, IDC expects the distribution to be 77.8% smartphones, 11.6% PCs, and 10.7% tablets.

Last week research analyst firm Gartner released their predictions for the overall global device spend in 2015, predicting a 7.2% increase in spend in 2015, to $226 billion.

It predicted a drop of 2.4% in PC sales in 2015 and a 3.5% growth in mobile phone shipments.