Spending on augmented and virtual reality is surging. Global demand for smartphones is fading. And enterprise 5G could soon hit a brick wall.
Those are some of the high points from the latest IT market research. And here’s your tech provider’s roundup.
Augmented/virtual reality: ready for takeoff
There’s nothing virtual about AR and VR. These technologies are real. How real? How about worldwide spending that will rise by nearly 80% next year, hitting $18.8 billion? That’s the latest forecast from market watcher IDC.
Over a 5-year horizon, the growth in AR/VR spending from 2019 to 2023 will be almost as impressive. It will achieve a compound average growth rate (CAGR) of 77%, IDC expects.
The biggest spenders will be businesses, not consumers. The 2 industries IDC says will spend the most on VR/AR over the next 5 years are retail and discrete manufacturing.
Other industries will more than double their spending on AR/VR, mainly because they don’t spend that much now. They include securities and investment services, and banks.
Consumers will spend a lot on the technology, but at a slower pace than business. IDC expects consumer spending on AR/VR could hit $7 billion next year. But over the 5-year forecast period, consumer spending will increase by “only” about 40%.
Smartphones: demand drooping
Smartphone consumers aren’t picking up the pace at which they buy new phones. Global sales of smartphones were pretty much flat in this year’s third quarter, dropping from the year-earlier quarter by a scant 0.4%, according to Gartner.
Behind the slowdown: Some consumers are waiting for 5G. Others are opting for mid-market devices, which they believe offer better value than low-end units.
As a result, vendors offering low-end to midrange phones did well in Q3. They included Samsung, Huawei, Oppo and Vivo. Huawei was the real standout, increasing its smartphone shipments in Q3 by an impressive 26%.
But those vendors focused on the high end did less well. Take Apple. It recorded a big drop in both sales and market share. Apple sold 40.8 million phones worldwide in Q3, compared with 45.7 million in the year-earlier quarter, a drop of nearly 11%. And Apple's share of the global smartphone market also dropped, falling to 10.5% from 11.8% a year ago, according to Gartner.
What’s ahead? Gartner thinks the upcoming Black Friday and Cyber Monday sales should inspire customers to buy new phones. So should a new emphasis on phones that have more intelligence. Gartner says these devices will offer content that's increasingly personalized, drawing on users’ contexts and preferences.
Enterprise 5G: cloud needed
Without a cloud-native platform, the momentum of enterprise 5G will come to a “screeching halt,” asserts ABI Research.
These cloud-native platforms are “complementary” for 5G, ABI says. However, they also present service providers with new challenges. As a result, some are hesitating where ABI believes they should be moving quickly.
For service providers, 3 questions are presenting the biggest roadblocks:
Q1: Does a cloud-native platform help to re-engineer existing processes?
Q2: Does it scale across a wide geographic and technology footprint?
Q3: Does the solution - and the vendor providing it - help to acquire the human capital that will be needed for software-centric operations?
There's a lot at stake. ABI believes the market for “cloudified” 4G and 5G network elements is poised to grow by an average of 25% a year, reaching $20 billion by 2024.
Getting it right will require a mix of not just technology, but also cultural and process changes, ABI says. Service providers will need to demonstrate expertise in telco, IT, big data and analytics.
Before they can cash in on 5G, service providers will have to make some important calls.