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Consumers will spend $2.1 trillion on technology products and services this year, and that number will only grow faster over the next several years, according to analysts with market research firm Gartner.
The $2.1 trillionwhich covers everything from mobile phones, tablets and smart devices to the services that enables these devices to connect to networksis a jump of $114 billion over what consumers spent in 2011, the analysts said. In addition, the rate of growth will only increase over the next few years, averaging about $130 billion a year to reach $2.7 trillion by the end of 2016.
“The three largest segments of the consumer technology market are, and will continue to be, mobile services, mobile phones and entertainment services,” Amanda Sabia, principal research analyst at Gartner, said in a statement. “There are two product classes, which in terms of absolute dollars are significantly smaller, but offer tremendous growth by 2016. These are mobile apps stores and e-text content. We fully expect consumers to more than triple their spending in these latter two categories by 2016.”
Mobile services are the top draw, garnering 37 percentor about $800 billionof the worldwide consumer tech spending this year, with that number expected to hit almost $1 trillion by 2016, Gartner said. Mobile phones will make up about 10 percent of the spending, or $222 billion, growing to $300 billion in four years.
That demand for mobile phonesincluding smartphoneshas been seen in various quarterly financial reports this month. Apple officials on July 24 announced that in the calendar second quarter, the company sold 26 million iPhones, and that was lower than normal as many buyers put off purchases while they await the expected release of the upcoming iPhone 5 in the fall.
Analysts with Juniper Research are estimating that Samsung, on the strength of its Galaxy S III, shipped 52.1 million smartphones in the second quarter.
According to Gartner, entertainment servicessuch as cable, satellite, Internet Protocol TV (IPTV) and online servicesin 2012 will generate $210 billion in sales and will grow to $290 billion in 2016.
Spending on app stores and content will grow rapidly, from $18 billion this year to $61 billion in 2016, according to the analysts. Consumers will spend about $5 billion in 2012 on e-text contentsuch as ebooks and online news, magazines and information serviceswith that growing to $16 billion in four years.
Gartners Sabia said that while consumers will pay for content they deem worth it, the analysts also found that consumers are willing to tolerate an ad-supported business model in exchange for free functions and content such as personal cloud storage, social networking, information searching, email, IM [instant messaging], person-to-person (P2P) voice (Skype and mobile voice over IP [VOIP]), streaming/downloading video and musical content when accessing the Internet.”
The Gartner analysts also said that growing the relationships between the segments on the consumer tech space is getting increasingly important. As an example, they point to the family rate plans being rolled out by AT&T and Verizon Wireless, where multiple people and mobile devices can draw from a single pool of voice and data minutes. Such connections to more mobile phones, tablets and notebooks will drive hardware sales as they increase the value of the mobile tech ecosystem.