Smartphones and their myriad individual features will become less important in the future as consumers continue to find that the devices are becoming commodities while the apps that run on them bring more value to their lives.
That's one of the key conclusions in a new research report, "Market Trends: Device and App Fusion Creates Opportunities in Personal Technologies," by Gartner analyst Annette Jump. The report looks at the status of today's mobile devices and the increasing spread of the Internet of things and wearable devices.
That fusion of devices and apps "is one of the key trends that is happening today," Jump told eWEEK in an April 22 interview. Consumers have largely focused in the past on mobile device hardware, which has now become more of a commodity, said Jump. Now, those same buyers are "focusing more on what they can do with them," using apps and services, rather than on the features in the hardware, she said. "In the future, devices will need to be able to work more closely together" as apps control other devices and more consumer products via the Internet of things.
As this happens, users will continue to spend more on devices, applications and services, Jump wrote in her report, with total spending on personal technologies to reach $2.7 trillion by 2019, up from about $2.4 trillion in 2015, she said.
But due to tough competition in the marketplace, that will likely mean more industry consolidation for manufacturers because device profit margins are often slim, said Jump.
"For vendors to survive, they need to get bigger," she said. "We saw this in the PC market. We expect to see this in the devices market."
Meanwhile, consumers will likely spend more on mobile content through 2019, while mobile services spending will roughly remain the same, she added.
The most robust growth in mobile devices in the next few years, however, will continue to be in hybrid portable computers as well as in wearables, which are the biggest growth areas today, said Jump. Hybrids include 2-in-1 notebooks and laptops, detachables and convertibles, while wearables include fitness wristbands, smartwatches and head-mounted displays.
Those trends are expected to lead both consumer and business spending in the marketplace.
"Hybrids in the recent past have been mostly purchased by consumers, but as businesses deploy Windows 10, many will deploy hybrid devices, too," she said. "We're also seeing growing offerings in business-oriented wearables, where vendors see bigger profits." Among the expected growth areas in that category are smart glasses and head-mounted displays.
That trend was seen in 2015, which was a challenging year for device makers and the overall device market as sales of smartphones, even iPhones, flattened. After overall market growth in 2014, total device volume dropped by 0.8 percent in 2015, driven by the ongoing decline in PCs and reverse interest and demand for tablets, the report states.
Through 2019, Gartner expects to see an increasing presence of IoT and intelligent devices, as well as deeper consumer and eventual business use of virtual personal assistants like Cortana, Google Now and Siri—again giving evidence for the importance of apps over devices, according to the report.
Over the next 12 to 18 months, the market will see more of a "shift from mobile devices to mobile people surrounded by various devices," according to the report.