Gartner Sees 2017 as a Stagnating Year for the Tech Sector
Gartner is the bearer of bad news if their forecast for 2017 plays out. Gartner sees 2017 being a flat year for PC's and Mobile Phones by projecting a total of 2.3 billion units in 2017, the same as it was for 2016.
Ranjit Atwal, research director at Gartner states in the report that "The global devices market is stagnating. Mobile phone shipments are only growing in emerging Asia/Pacific markets, and the PC market is just reaching the bottom of its decline."
This is why Samsung introduced new Galaxy A-series right out the gate to start off the New Year gunning for emerging market customers with excellent specifications for the mid-tier market starting at $400 or about half of what a premium device sells for.
Apple competitors Huawei, Oppo and Vivo all sell mid-tier smartphones with 5" displays in the $250-400 range. Apple's iPhone SE sells for between $400 and 450 with a 4" display. It's been rumored that Apple would attend the Mobile World Congress this year and if so, perhaps we'll see Apple introduce a 4.7" display for the iPhone SE and bump their entry unit to 32GB data to better compete in this important segment serving emerging markets. With Apple pushing into Indonesia this year, this would be the time to beef up their SE model.
If Apple could strengthen their entry iPhone and deliver a hot anniversary model this fall, I think that Apple will be able to beat the stagnation that Gartner is forecasting.
Mr. Atwal added in Gartners report that "Consumers have fewer reasons to upgrade or buy traditional devices. They are seeking fresher experiences and applications in emerging categories such as head mounted displays (HMDs), virtual personal assistant (VPA) speakers and wearables."
It was rumored back in September that Apple may have a Siri-centric Home Automation Device like Google Home and Amazon's Echo in the works for this year. An Apple HMD is also reportedly in the works but no time frame is known at this time.
Finally, the Gartner report notes that "Device vendors are increasingly trying to move into faster-growing emerging device categories. 'This requires a shift from a hardware-focused approach to a richer value-added service approach." .
The services area is one that Apple's CEO has championed at Apple to the dismay of Wall Street. During Cook's opening statement covering their last financial conference in October, this is some of what he said on this topic:
"We had a record setting quarter for services with revenue growth accelerating by 24% reaching 6.3 billion. App store revenue continued to skyrocket where music revenue grew by 22% thanks to the growing popularity of Apple Music.
We remain very confident about the future of our services business given the unmatched level of engagement, satisfaction and loyalty of our growing installed base. We have almost doubled the size of our services revenue in the last four years, and as we've said before, we expect it to be the size of a fortune 100 company in fiscal 2017."
Apple seems to have all the bases covered for 2017 and only time will tell if they'll be able to stand above their competition that will be battling it out to just break even in a very tough year that Gartner is projecting.
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