Worldwide Mobile Phone Spending Flirts with $400 Billion

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Worldwide spending on mobile phones will reach nearly $399.5 billion this year, a 4.3-percent increase, as shoppers make more room in their budgets for premium devices, according to Gartner’s latest analysis of the device market. Caught in this phone upgrade cycle, buyers will spend over $423 billion by 2019, predicts the research firm.

“The increased ASP [average selling price] for mobile phones was driven by users across the board. They are replacing their basic phones with better-quality and more feature-rich basic phones, due to improved product portfolios from rising vendors such as Huawei and Oppo,” observed Gartner research vice president Annette Zimmermann in a statement. “In emerging markets, the majority of users are upgrading to better basic phones as the leap to premium phones remains out of reach for most.”

Last year, Chinese vendors Huawei, Oppo and BBK helped raise the ASP of basic phones by 13.5 percent. This year, they’re expected to increase prices by another four percent on average.

The arrival of some highly-anticipated handsets later this year will also boost the premium phone market, predicted Zimmerman.

“The high-end smartphone ASP will continue to soar, given the announcement of the Samsung Galaxy 8 and the release of the tenth-anniversary Apple iPhone later this year. We expect the premium-phone ASP to increase by four percent in North America in 2017,” she added.

All told, mobile phone vendors are poised to ship 1.91 billion units this year, a figure that will surpass 1.95 billion in 2019.

Average selling prices for PCs are also expected to rise due to pricier component costs, particularly system memory. Since June 2016, DRAM prices have doubled, noted Gartner.

“As a result, PC providers will increase the prices of PCs toward the end of the year,” said Ranjit Atwal, research director at Gartner, in a statement. “We expect the overall ASP for PCs to increase by 1.4 percent in current U.S. dollars.”

In general, buyers are bypassing the bargain bin. “Across the world, the device market is becoming less price-sensitive. Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products,” remarked Atwal.

That appetite will help push the overall device market, which includes PCs (desktop, notebooks and ultramobiles), tablets and mobile phones, to $599 billion this year, a two-percent gain. Mobile phone sales will make up more than two-thirds (67 percent) of that total.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.