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July 27, 2012

New Shift to Services in Consumer Technology Spending

By Gary Kim, Contributing Editor

Over the past decade or so, there has been an interesting shift in consumer technology spending, in a direction that arguably provides more revenue opportunity for cable and telco access providers. At one point in time, you might have argued that consumer technology spending was lead by TV purchases, or PC purchases.

These days, in addition to mobile phones, it is services spending that is leading technology purchases.

Consumer spending on mobile products tops all consumer categories in 2012, according to analysts at Gartner (News - Alert), who point out that "the three largest segments of the consumer technology market are, and will continue to be, mobile services, mobile phones and entertainment services," according to Amanda Sabia, principal research analyst at Gartner.

Note that of the top three categories, two are services provided by mobile, cable and fixed network telcos.

Mobile services are expected to generate 37 percent of total worldwide consumer technology spending in 2012, $0.8 trillion, rising to almost $1 trillion by 2016.

Mobile phones will account for 10 percent of total spending in 2012, about $222 billion, rising to almost $300 billion by 2016.

Similarly, entertainment services including cable, satellite, IPTV (News - Alert) and online gaming, will account for 10 percent of total consumer spending on technology products and services in 2012, at $210 billion, rising to almost $290 billion in 2016.

Gartner predicts that consumer spending on mobile apps stores and content will rise from $18 billion in 2012 to $61 billion by 2016, and that spending on e-text content (e-books, online news, magazines and information services) will rise from $5 billion in 2012 to $16 billion by 2016.

Consumers will spend $2.1 trillion worldwide on digital information and entertainment products and services in 2012, according to Gartner, Inc. This amounts to a $114 billion global increase compared with 2011, and spending will continue to grow at a faster rate than in the past, at around $130 billion a year, to reach $2.7 trillion by the end of 2016.

The $2.1 trillion consists of what the consumers will spend on mobile phones, computing and entertainment, media and other smart devices, the services that are required to make these devices connected to the appropriate network, and software and media content that are consumed via these devices.


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Edited by Brooke Neuman
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