Worldwide IT spending is forecast to increase by 4.5 percent in 2014 at constant currency, or 4.1 percent in U.S. dollars, with a significant proportion of this growth still being driven by smartphones, according to IT research firm IDC.
Excluding mobile phones, IT spending will increase by just 3.1 percent this year in constant currency (2.8 percent in U.S. dollars).
The U.S. IT market will increase by 4 percent this year, and Western Europe will maintain a 2 percent growth rate overall, while total worldwide IT spending will reach almost $2.1 trillion in 2014, according to the report.
The commercial PC refresh has proven stronger than originally forecast, with IDC updating its PC spending to 3.5 percent growth in 2014--the fastest pace since the post-financial crisis rebound of 2010.
The PC cycle has already driven a market upturn in Japan, where economic growth and upcoming tax increases drove a surge in capital spending in 2013, and there has also been an improvement in PC shipments in Western Europe, although the report cautioned PC spending in Europe will still be down by 1 percent due to average price declines.
"PCs were stronger than expected because of the commercial refresh related to the end of support for Windows XP, coupled with a lot of pent-up demand for replacements and upgrades after so much IT budget and consumer spending was directed towards tablets and other devices instead of PCs during the past two to three years," Stephen Minton, program vice president for IDC, told eWEEK.
The U.S. tablet market is now forecast to increase by just 2 percent this year, but will rebound to 7 percent growth in 2015 as the PC cycle begins to wane.
However, worldwide tablet spending has slowed from 29 percent year-over-year growth last year to 8 percent in 2014, but IDC expects it accelerate back to double-digit growth of 10 percent next year.
"Growth in smartphones and tablets is already decelerating, and will not continue to drive overall market growth in the way that it has for the past four to five years. Even in emerging markets, growth rates will begin to slow as penetration rates increase and low-cost devices gain market share," Minton explained. "There is still lots of growth ahead for phones and tablets, but not the kind of explosive growth we’ve had in recent years."
Minton said that while there is still room for lots of growth ahead, the market has already passed the peak of the mobile explosion, and the will gradually become more mature over the next five years.
The economic slowdown in China in 2013 created a significant swell of pent-up demand that is now driving improvements in technology investment—though IT spending growth in China decelerated to 8 percent last year, it is on course for 13 percent growth in constant currency in 2014.
"We’ve clearly moved beyond that period when all emerging markets seemed to be moving in the same direction at the same pace, when economic expansion was driving rapid IT investment," Minton said. "Even the BRIC grouping is relatively meaningless now."
Russia, he noted as an example, has had no growth at all in 2014 due to the impact of Ukraine, and growth has weakened in Brazil and India since last year, constrained by weaker economic growth, whereas China is already feeling the benefit of pent-up demand and recovering business confidence, driving a significant uptick in IT spending this year.
Including telecommunications services, the worldwide information and communications technology (ICT) market is forecast to increase by 4 percent to $3.7 trillion, with telecom services growth of 4 percent driven by mobile data services and increasing broadband penetration.