On March 27, 2014, Gartner, Inc. published a press release announcing public availability of its 1Q14 IT Spending Forecast. The release mentioned some report findings:
- The top end market for “mobile phones” (Gartner’s term) continues to contract, while most of the growth in overall users is to be found at the low end, with smart phones powered by Android a clear leader
- The continued shrinkage in the number of PC users will carry with serve to further define the remaining market. This segment will be “more engaged” (quoted from Gartner’s release), which I interpret to mean more inclined to purchase higher end PCs
- The market for tablet computers and what Gartner refers to as “ultramobiles” will be characterized substantial growth (the “Tablet (Ultramobile)” category looks to nearly double in size from 2013 – 2015. This growth is not treated in the release, but is very much the subject of another Gartner release, this one dated March 27, 2014, and titled Gartner Says Worldwide Traditional PC, Tablet, Ultramobile and Mobile Phone Shipments are on Pace to Grow 6.9 Percent in 2014
- Enterprise Software sales will grow the most, 6.9% year-over-year, and 12% from 2013 to 2014
1) Continued Shrinkage in the market for top end smart phones
Nothing new here, though I would caution interested readers to avoid the pitfall of assuming this, necessarily means lower sales growth for Apple’s top of the line smartphones. We need some glimpse into iPhone sales into the China Mobile market before we can reach a defensible conclusion on this one.
2) Buyers acquire fewer, more powerful and full featured PCs
If the PC sales forecast included in this report proves true, then a lot of the low end devices PC OEMs have pushed onto the market (as tablet competitors) may end up sitting on shelves. Acer and Asus may feel more of the pain. But HP has made some potentially risky changes in online buying options for the SMB and Home markets, which could contribute to some problems for them, as well (I will write a post to this blog shortly with further detail).
3) Tablet and Ultramobile computer sales look to be very robust for the year
The forecast of the number of new units sold is very impressive, but the actual dollar impact on overall IT spending from this segment is comparatively insignificant. Despite explosive growth, Gartner sees 4.4% growth, year over year from the devices segment. So is there much money to be made in these devices? From these figures I would say it make sense to answer this important question with some caution.
4) Enterprise Software Sales are the fastest growing segment
The big news here, which is to be found in the note at the bottom of the release, is the growing enterprise appetite for databases and analytics. This may very well point to good years for Mature ISVs, including Oracle®, Microsoft®, IBM®, EMC and SAP. Microsoft’s Cloud offers — Office 365 and Azure — may also continue to record very healthy sales figures, while IBM scrambles to increase its cloud real estate in a catch up mode.
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