New Delhi: End-user spending on devices (PCs, tablets, ultramobiles and mobile phones) is likely to fall 5.7% to $606 billion largely due to price increases resulting from local currency devaluation against the dollar, according to Gartner Inc. The drop in spending will be the first since 2010.

“Our forecast for unit shipment growth for all devices in 2015 has dropped by 1.3 percentage points from last quarter’s estimate," said Ranjit Atwal, research director at Gartner. “This was partly due to a continued slowdown in PC purchases in Western Europe, Russia and Japan in particular, largely due to price increases resulting from local currency devaluation against the dollar."

The total number of devices including personal computers, tablets, ultramobiles and mobile phones worldwide is projected to reach 2.5 billion units in 2015, up 1.5% from 2014. This is lower than the previous forecast of 2.8% growth. The global PC shipment market will touch 300 million units in 2015, a decline of 4.5 % over last year. The complete shut down of Windows XP has affected the PC negatively, the report said.

“The end of the migration from Windows XP negatively affected the PC market globally during the first half of 2015. However, the greater impact remains the currency depreciation against the dollar," the report said. “PC vendors are increasingly reducing their inventory levels — by at least 5% until the end of 2015 — as a way to minimize pricing exposure in the channel."

“We do not expect the global PC market to recover until 2016," said Atwal. “The release of Windows 10 on 29 July will contribute to a slowing professional demand for mobile PCs and premium ultramobiles in 2015, as lifetimes extend by three months. However, as suppliers and buyers adjust to new prices, Windows 10 could boost replacements during 2016."

The ultramobile segment, including tablets and clamshells, is also expected to shrink by 5.3%, reaching a total 214 million units in 2015, with tablets, which will account for 207 million units, declining by 5.9% from 2014.

“The tablet market is hit by fewer new buyers, extended life cycles and little innovation to encourage new purchases," said Roberta Cozza, research director at Gartner. “At the same time, the value of a smartwatch for the average user is still not compelling enough and the impact of these wearables on tablet purchases remains negligible."

Cozza said tablet has become a “nice-to-have" device, and “there is no real need for an upgrade as regularly as for the phone".

The mobile phone market growth rate is likely to slow down to 3.3% growth in 2015, even though mobile phone prices continue to fall. “The global market has been affected by a weaker performance in China. We have witnessed fewer and fewer first time buyers in China, a sign that the mobile phone market in there is reaching saturation. Vendors in China will have to win replacement buyers and improve the appeal of their premium offerings to attract upgrades, if they want to maintain or increase their market share," said Annette Zimmermann, research director at Gartner.

“Vendors looking to grow their performance in the global smartphone market will be challenged to quickly enhance their expansion into emerging markets outside of China, where we still witness a sizeable share of feature phones and an opportunity for double-digit smartphone growth."

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