Tablet saturation to dampen IT spending spurt

Slowing mobile sales in mature market drags down otherwise positive global spending forecast

Slowing smartphone and tablet sales have led analyst IDC to lower its global IT spending forecast for 2014.

For the rest of this year, IDC predicts global annual IT spending growth will reach 4.6 per cent, down from its previous forecast of five per cent. It blamed early signs of saturation in the smartphone and tablet market, along with economic slowdown in emerging markets.

But excluding smartphones, the IT spending growth rate in 2014 will actually accelerate to 3.4 per cent, compared to a rate of 2.9 per cent last year (also excluding smartphones).

"IT spending will be inhibited by the economic slowdown in emerging markets in 2014, in addition to an inevitable deceleration in the growth of smartphones and tablets," said IDC.

"With the explosive growth of mobile devices having begun to inevitably cool from the breakneck pace of the past two or three years, overall industry growth will dip slightly."

Despite the overall cooling of industry growth, some technologies are heating up as businesses indulge in upgrades they had put off during more difficult economic years.

Spending on servers will jump three per cent this year compared to a decline of four per cent last year, and storage spending will grow by the same amount annually, compared to a 0.5 per cent slump in 2013.

Even the PC market - which has seen global shipments slump annually over recent quarters - will stage something of a comeback, with commercial shipments in mature markets leading the charge.

A boost in hardware investment will have a knock-on effect on IT services, whose revenue this year is set to grow four per cent year on year, up from a three per cent annual boost in 2013.

Stephen Minton, IDC's vice president for its Global Technology and Industry Research Organisation, said the lowering of the global forecast is only really half the story.

"The inevitable slowdown in the explosive pace of smartphones and tablets is masking an underlying improvement in many areas of IT spending," he said.

"Businesses in mature economies are beginning to feel more confident about the economy compared to a year ago, and this is translating into new IT investments.

"There's significant pent-up demand in the US and Europe for infrastructure upgrades, capacity and bandwidth investments, and overdue replacement cycles. Many businesses will choose to fix the roof while the sun is shining in 2014."