|Global consumer tech spending is expected to reach $1.6 trillion this year / Photo by Aleksandra Suzi via 123rf|
Global consumer tech spending is expected to reach $1.6 trillion this year, driven by robotic systems, wearables, smart home devices, augmented reality and virtual reality headsets, and drones. This is based on a recent report by the International Data Corporation, an American provider of marketing intelligence.
IDC report on consumer purchase of technologies
The report detailed that consumer purchases on both emerging and traditional technologies will be strong from this year to 2023, which is the end of their forecast period. The report titled “Worldwide Connected Consumer Spending Guide” showed that by 2023, consumer tech spending will reach $2.06 trillion globally with a five-year compound annual growth rate of 5.1 percent. The CAGR is a useful measure of growth over multiple periods and shows the rate of return of an investment for a certain period.
IDC Customer Insights & Analysis group’s research manager Stacey Soohoo said via newspaper The Economic Times that technology advances will continue to drive consumer spending and what “convenience” means to these connected consumers. She highlighted people’s adoption of consumer robots for maintenance and household cleaning as well as home monitoring and security systems as they undergo digital transformation in their everyday lives.
Consumer spending on traditional tech
IDC also mentioned in their report that about 75 percent of the global consumer tech spending will be on mobile phone services, especially data and voice, and traditional tech. Personal computing gadgets and smartphones will comprise the rest of the percentage. The growth of spending on traditional tech will have a 2.2 percent CAGR. Soohoo said that people focus so much on the emerging technology that they don’t realize how “enormous” and big the traditional market of technology still is.
|On-demand service is a feature and prime facility of cloud computing services / Photo by rawpixel via 123rf|
Businesses that are finding new ways to interact with their consumers will find the mix of functionality and personalization to offer “frictionless experience,” the research manager continued. In the same way, technology providers are already blending physical and digital experiences such as on-demand services. In the context of technology, on-demand service is a feature and prime facility of cloud computing services that allow the users to access raw cloud resources at a run time wherever or whenever they need it. The service also lets them use software and storage, for example, instantly without limits and in for different applications.
For the analysis, the markets covered were the US, Canada, Western/Eastern/Central Europe, Japan, Africa, the Middle East, Asia Pacific, PRC, and Latin America.
US: the largest market for consumer technology
Out of the 9 regions that IDC covered to study the connected consumer market, the USA appeared as the largest market for consumer technology. Its consumer technology spending is forecasted to reach $412 billion this year alone. The US is followed by China as the second-largest market this year. Its spending will reach $328 billion. Western Europe comes in at third with its consumer tech spending pegged at $227 billion.
Emerging technologies like drones, smart home devices, AR and VR headsets, and robotic systems are expected to grow to a five-year compound annual growth rate of 13.2 percent. This growth alone captures about a third of total consumer spending by 2023.
Consumer spending and the economy
Consumer spending is the voluntary private household consumption or the exchange of money for services and goods in the economy. The things that people buy for their everyday needs create a demand that keeps businesses profitable and hires new employees. Consumer spending is the most important driving force of an economy.
Personal consumption expenditures include goods and services. Under the "goods" category are two sub-categories, which are consumer durable goods and non-durable goods. In a separate report by the Bureau of Economic Analysis of the US Department of Commerce, it detailed the percent change from the preceding period of personal consumption expenditures by state and region. Excluding motor vehicles and parts, furnishings and durable household equipment, and recreational goods and vehicles, below is a list of other durable goods by region in 2017-2018.
New England: 3.6 percent out of $52,515 per capita personal consumption expenditures
Mideast: 5.7 percent out of $49,895
Great Lakes: 4.1 percent out of $41,729
Plains: 4.4 percent out of $42,152
Southeast: 5.1 percent out of $37,795
Southwest: 5.9 percent out of $37,941
Rocky Mountain: 7.8 percent out of $41,255
Far West: 7.4 percent out of $46,401
Durable goods are economic indicators that measure the number of orders placed with domestic manufacturers for the delivery of hard goods in the future or near term. A high durable goods number indicates that an economy is on the upswing while a low number means that the economy is in a downward trajectory.
Meanwhile, manufacturers and suppliers director Global Sources published that the most popular consumer electronics based on inquiry are: laptops, microSD cards, Bluetooth headphones, smart TVs, wireless earphones, USB flash drives, Bluetooth speakers, voice-activated speakers, GPS personal trackers, wired earphones, Android-based TV set-top boxes, handheld two-way radios, car GPS trackers, dash cameras, portable solar chargers, Wi-Fi cameras, POS terminals, LED TVs, and netbooks.