i3 - March/April 2018 - 45

By Jim Harris

Business

T EC H ST R AT EG I E S

Digital Spending
Dominated by
Smartphones Globally

F

or the first time, global digital spending will exceed
$1 trillion in 2018. And surprisingly, just three product
categories make up 75 percent of this global
expenditure: smartphones (48 percent); TVs (12 percent);
and mobile PCs/tablets (15 percent).
The only category consistently growing
in market share is smartphones. From
2011 to 2018, TV's market share of digital spending declined from 16 percent
to 12 percent and mobile PCs and tablets fell from 19 percent to 15 percent.
These declines are minor when compared to all other digital products combined - which have seen their market
share cut in half (from 48 percent in
2011 to just 25 percent in 2018).

Smartphone Takeover

The key insight: smartphones are
eating the digital world. Few people
buy a point-and-click digital camera
anymore because smartphones have
12+ megapixel cameras. (My Huawei
Mate 10 Pro has dual Leica cameras -
a 20 megapixel and a 12MP).

Why buy a GPS when your phone
serves as one and you can use Waze
to navigate city traffic? And today's
smartphones have accelerometers
that can track steps all day.
The last gadgets standing really
are the TV and the portable PC -
but even they are being challenged
by the smartphone. TV unit sales
have declined one percent a year
globally since 2014 while the PC/PC
tablet market has shrunk by seven
percent a year.

Phablet Boom Driving
Smartphone Market

Millennials now watch far more video
on their smartphones than they do on
TV and as they age, the trends are
going to continue. What is driving all

Jim Harris is the author of Blindsided,
which focuses on disruptive innovation.
Follow him on Twitter @JimHarris or
email at jim@jimharris.com

Global Sales
of Digital Devices
(per million units sold)

Three Categories are 75%
of Global Digital Spending:
(Smartphones (48%), TVs (12), and PCs/Tablets (15)
50
SMARTPHONES

40

this is "phablets" - large smartphones
with high resolution screens so you can
watch video anywhere.
Within the smartphone category,
phablets are predicted to overtake
regular smartphone shipments by 2019,
according to IDC.
IDC defines phablets as smartphones with screen sizes of 5.5-inches
to seven-inches. (The term phablet
is a cross between phone and tablet.)
Between 2017 and 2021, phablet
sales are predicted to grow at compounded annual growth rate (CAGR)
of 18.1 percent and hitting a billion
units by 2021. By contrast small smartphones with screens of 5.5-inches or
less are expected to decline.
With more people watching video
on phablets, this will challenge the sale
of TVs. Smartphones are getting so powerful that they will begin cannibalizing
PC sales. Imagine no longer taking
a laptop on your business trips. Instead
you just connect your smartphone to
an external monitor and keyboard via
Bluetooth and instantly it becomes your
computing device.
These trends are accelerating the
shift from a PC-centric computing
world to a mobile one.

PC/PC TABLET

TV

1246

TV

SOURCE: GFK

30

SMARTPHONES
1330

1527
1418 1480

MOBILE PC

20

TABLET

10

ALL OTHER
PRODUCTS

2011

2012

C TA . t e c h / i 3

2013

2014

2015

2016

2017

2018

406 359
317 294 283

246 231 228 223 236

2014 2015 2016 2017 2018

2014 2015 2016 2017 2018

2014 2015 2016 2017 2018
MARCH/APRIL 2018

45


http://www.twitter.com/JimHarris http://www.CTA.tech

Table of Contents for the Digital Edition of i3 - March/April 2018

Contents
i3 - March/April 2018 - Cover1
i3 - March/April 2018 - Cover2
i3 - March/April 2018 - Contents
i3 - March/April 2018 - 2
i3 - March/April 2018 - 3
i3 - March/April 2018 - 4
i3 - March/April 2018 - 5
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i3 - March/April 2018 - 7
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i3 - March/April 2018 - 19
i3 - March/April 2018 - 20
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i3 - March/April 2018 - 38
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i3 - March/April 2018 - 40
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i3 - March/April 2018 - 43
i3 - March/April 2018 - 44
i3 - March/April 2018 - 45
i3 - March/April 2018 - 46
i3 - March/April 2018 - 47
i3 - March/April 2018 - 48
i3 - March/April 2018 - 49
i3 - March/April 2018 - 50
i3 - March/April 2018 - 51
i3 - March/April 2018 - 52
i3 - March/April 2018 - Cover3
i3 - March/April 2018 - Cover4
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