- IDC also forecast that AR/VR headsets, drones, on-demand services, robotic systems, smart home devices, and wearables, will deliver strong growth
- Spending growth for traditional technologies will be relatively slow with a CAGR of 2.2 per cent over the forecast period
Smart home devices and on-demand services will account for roughly 90 per cent of emerging technologies spending. A latest report published by International Data Corporation (IDC) also forecast that emerging technologies, including AR/VR headsets, drones, on-demand services, robotic systems, smart home devices, and wearables, will deliver strong growth with a five-year CAGR of 13.2 per cent. This growth will enable emerging technologies to capture nearly a third of consumer spending by 2023.
“Advances in technology continue to drive what ‘convenience’ means today and in the future for connected consumers. Ranging from consumer robots for household cleaning and maintenance to smart lighting or home security/monitoring systems, connected consumers are adopting these solutions in their homes and everyday lives as they go through their own digital transformation,” said Stacey Soohoo, research manager with IDC’s Customer Insights & Analysis group.
Consumer spending on technology to reach $2.06 trillion in 2023
Consumer spending on technology is forecast to reach $1.69 trillion in 2019, an increase of 5.3 per cent over 2018. According to the latest Worldwide Semiannual Connected Consumer Spending Guide from International Data Corporation (IDC), consumer purchases of traditional and emerging technologies will remain strong over the 2019-2023 forecast period, reaching $2.06 trillion in 2023 with a five-year compound annual growth rate (CAGR) of 5.1 per cent.
Roughly three quarters of all consumer technology spending in 2019 will be for traditional technologies. Mobile telecom services (voice and data) will account for more than half of this amount throughout the forecast, followed by mobile phones and personal computing devices. Spending growth for traditional technologies will be relatively slow with a CAGR of 2.2 per cent over the forecast period.
Opportunity in augmented reality, virtual reality, and home automation
Communication and entertainment will be the two largest use case categories for consumer technology, representing more than 70 per cent of all spending throughout the forecast. More than half of all communication spending will go toward traditional voice and messaging services. Entertainment spending will be dominated by watching or downloading TV, videos and movies, as well as listening to music and downloading and playing online games. The use cases that will see the fastest spending growth over the forecast period are augmented reality games (136.3 per cent CAGR) and virtual reality video/feature viewing (47.3 per cent CAGR).
“That consumers are connected through a myriad of devices is a given, but IDC’s Connected Consumer Spending Guide reveals what kinds of applications and experiences they are spending their money on while using a device,” said Ramon T. Llamas, research director, Devices and Displays at IDC.
He added, “Communication and entertainment have long been the mainstays among consumers and will hold the leading positions throughout the forecast. Beyond them is a long list of emerging use cases whose spend will outpace the rest of the market, including augmented reality, virtual reality, and home automation. These highlight the direction that consumers are going and players throughout the ecosystem should plan ahead to capture this expected rise in demand.”