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2022 Predictions: Devices

Join Senior Analyst Eric Costa for an exclusive review of our 2022 devices edition, Top 3 Predictions for Devices, during which our subject-matter expert will discuss the unsustainability of current PC market growth levels, tablet market revenue growth deceleration, rapid growth in Device as a Service, and more.

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Top 3 Predictions for Devices in 2022

Devices demand to decelerate in 2022

Devices market will see growth return to pre-pandemic levels throughout 2022

Many thought the initial surge in devices demand would quickly fade after the start of the COVID-19 pandemic, but that has not been the case. Revenue growth across the ecosystem, especially in PCs and tablets, has been much higher in recent quarters than traditional single-digit growth. However, this current elevation is unsustainable.

Over the past two years, the devices market has seen a major industry shift in supply and demand that has reshaped the ecosystem and has led to strong and consistent growth from most device vendors. It began with factory closures that hurt early 2020 supply chains and revenue growth, followed by a major spike in demand for devices used to entertain, work and learn from home during the pandemic. A shortage of components has led to this demand being unmet as of the end of 2021, leaving TBR to question whether vendors will be able to maintain revenue growth, unit sales and average unit revenues in the long term.

TBR expects a drop in demand and revenue growth by the end of 2022 due to these unsustainable conditions; however, other factors will emerge to help stabilize the devices market at pre-pandemic levels. These trends include continued revenue growth, albeit at a decelerated, low-single-digit pace rather than the 20%-plus year-to-year growth seen since mid-2020, as well as vendors’ releases of Windows 11 PCs and additional 5G device enhancements to drive refreshes in the coming year.

2022 devices predictions

  • PC market growth unsustainable, will return to single digits in 2022
  • Tablet market revenue growth set to decelerate in 2022
  • DaaS will lead all PC services in revenue growth through 2022

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Telecom Business Research’s 2022 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud, telecom, devices, data center, and services & digital.

1Q18 device revenue results were boosted by market shifts and increasing ASPs in PCs and smartphones compared to a weaker 1Q17

HAMPTON, N.H. (July 13, 2018) — Technology Business Research, Inc.’s (TBR) 1Q18 Devices and Platforms Benchmark finds that there is ongoing revenue opportunity in both the PC and smartphone markets. Total benchmarked revenue increased 15.9% year-to-year to $112 billion despite indications of saturation in the high end of the PC market.

Total PC benchmarked revenue increased 12% year-to-year to $32 billion. Total PC benchmarked gross profit increased 10.4% year-to-year to $5 billion despite increasing component costs. “Despite speculation that the PC market is dead, major device OEMs have been able to successfully navigate the shifting market and generate healthy profits,” said TBR Analyst Dan Callahan. “Renewed appetite for premium PCs in enterprise — and PC OEMs shifting their go-to-market strategies to respond — has been the primary driver.”

Total benchmarked smartphone revenue increased 11% year-to-year to $72 billion. Total smartphone benchmarked gross profit increased 14.8% year-to-year to $23 billion. Smartphone OEMs are combating worldwide saturation by increasing average selling prices (ASPs). Apple’s gamble with a $1,000 smartphone paid off, as customers responded with demand, and Android peers are following suit.

Device as Service (DaaS), an expansion of the former PC as a Service market, is transforming into an offering aimed at supplanting traditional PC financing. The benchmark explores how HP Inc. was the first of the big three PC OEMs to capitalize on the emerging opportunity and has been the first with concrete outbound messaging to partners and customers. This has afforded the company a lead, but it is not cemented. Dell Technologies and Lenovo will use the path HP Inc. paved to introduce DaaS to the market and quickly solidify their own unique solutions. Lenovo and HP Inc. see opportunity beyond the PC in PC as a Service, thus the introduction of DaaS.

The DaaS opportunity remains mostly untapped. Customers and partners are still trying to understand how this service differs from traditional financing and are still kicking the tires on the analytics often attached by OEMs as the main selling point of DaaS.

TBR’s Devices and Platforms Benchmark provides insight on interrelated ecosystems, including device vendors, platform providers, supplier relations, and technology partners across the consumer and commercial spaces. TBR’s vendor-centric analysis speaks to industry trends, while market sizing illustrates opportunity. Our Devices and Platforms research includes PC, tablet and smartphone vendors; platform providers; and technology partners.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

 

 

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.