Trends in technology spending have been undergoing many changes. According to data from Gartner, Inc., worldwide shipments of devices (PCs, tablets and mobile phones) are forecast to reach 2.32 billion units this year, up 4.5% from 2012. But the growth is concentrated on lower-priced devices.
In 2013, global shipments of traditional PCs are projected to total 303 million units, down 11.2% from 2012 and the overall PC market is expected to fall 8.4%. On the other hand, tablet shipments are expected to surge 53.4% higher this year. Mobile phone shipments are projected to deliver 3.7% growth. By 2015, tablet sales are projected to surpass those of PCs on an annual basis.
The way users use devices is also changing. Those that have to balance work and play are likely to decide that the advantage of buying and carrying one device outweighs the loss in utility they may experience when compared to owning different devices for different functions.
These trends are also impacting software distribution. Software and, perhaps more importantly, apps are often free. Software is becoming more or less a means to sell hardware. While there will likely still be some specialized applications that can generate a large profit margin, the primary applications for mainstream use are typically not things that are sold. Instead, they come with the device that users choose to buy.
These trends have an effect on stocks we consider for client portfolios. Whether or not a company has some type of mobile solution has become more relevant when we are evaluating a company’s business strategy and prospects.