The global "smart connected device" market – which includes PCs, tablets and smartphones but not cameras, Blu-ray players, set-top boxes, games consoles, smart TV sets etc – grew by 27.1 percent in the third quarter of 2012 to 303.6 million units worth $140.4 billion dollars, according to IDC's Worldwide Quarterly Smart Connected Device Tracker.
The US-based research company says it expects Q4 shipments to reach 362.0 million units worth $169.2 billion dollars, which will be up by 26.5 percent over the same quarter last year.
IDC said in a statement today (Monday): "Holiday season growth will be driven by tablets and smartphones, which are expected to grow 55.8 percent and 39.5 percent year-over-year respectively [corrected], while PCs are expected to decline slightly from this quarter a year ago."
Samsung was the biggest supplier in Q3 of 2012, shipping 66.1 million units with a market share of 21.8 percent. Apple was second with 45.8m units and a market share of 15.1 percent, with Lenovo in third place (21.1m units, 7.0 percent). However, Apple "led all vendors in value with a total of $34.1 billion in 3Q12 and an average selling price (ASP) of $744 across all device categories," says IDC. Samsung's ASP is $434.
HP, in fourth place, saw shipments fall by 20.5 percent to 14m units, and its market share fell from 7.4 percent in Q3 last year to 4.6 percent in this year's third quarter. As IDC points out, HP "is virtually non-existent in the mobile space".
IDC says: "Looking forward, IDC expects the worldwide smart connected device space will continue to surge well past the strong holiday quarter and predicts shipments to surpass 2.1 billion units in 2016 with a market value of $796.7 billion worldwide."
IDC's figures show growth in all product categories, with even desktop PCs growing by 1.2 percent (in units) between 2012 and 2016. Tablets should grow by the largest amount (131.2 percent) from the lowest base, but in 2016, two thirds of smart device sales will be smartphones, with 1.4 billion units shipped in the year.
IDC hasn't provided a breakdown by operating system, but I think I'm safe in predicting that the majority will be running Google Android. I'm assuming that Apple will continue to put extremely high profit margins before market share, as it did with PCs, and end up losing the bulk of the market. (Apple could even see sales tumble, just as sales of Macs fell following the launch of Windows 95.)
It looks as though IDC is making the same assumption, because it says: "The shift in demand from the more expensive PC category to more reasonably priced smartphones and tablets will drive the collective market ASP from $534 in 2011 to $378 in 2016."
Today, of course, PCs are not necessarily more expensive. Mainstream Windows laptops are often cheaper than Apple iPhones and iPads, as well as high-end Samsung phones (such as the Galaxy S III) and tablets. However, mass-market Android phone prices are trending towards $100 or less.
It's not clear whether IDC's device tracking has much value. The trends are already obvious, and have been for some years. The interesting information is whether – and by how much – device sales are complementary and how many are replacements. The most interesting prediction would be about device replacement rates in different categories.
For example, we know you can push the lifespan of a desktop PC further nowadays, especially with Microsoft making Windows leaner and more efficient. I therefore expect fewer companies are now replacing all their Windows PCs every 3 years, as they used to. However, it makes a big difference whether they are replacing them after, say, 5 years, or never.
Also, when will the lifespan of tablets and smartphones extend beyond the current 1-2 years? At some point, smartphone sales will start to fall, because everybody who can afford one will already have one, and the vast majority of them won't need replacing. Either way, the smartphone market won't be able to grow for more than 30 years, like the PC market, because the sales volumes are just too big.
Finally, if roughly a third of the world's adult population is going to buy at least one connected device every year, then many billions are going to end up being (at best) recycled or in landfill. This is going to look like an increasingly dumb idea in a world of rapidly diminishing resources.