Unpacking the $868 Billion Forecast
According to the latest projections from technology research firm Gartner, worldwide spending on devices—including PCs, tablets, and mobile phones—is expected to grow 9.8% this year to reach $868 billion. This comes as part of a broader surge in IT spending,
which is forecast to climb 14.2% overall to $6.37 trillion, largely fueled by massive investments in artificial intelligence infrastructure. While the growth in device spending is more modest compared to the explosive 62.5% jump in data centre systems, it represents a significant market shift. The increase is not necessarily driven by selling more units, but by a move towards more expensive, capable hardware across the board. Factors like rising memory prices and semiconductor constraints are pushing average selling prices higher, influencing what manufacturers produce and what consumers and businesses buy.
The AI PC Revolution Takes Hold
A primary driver of this spending surge is the arrival of the AI PC. These are not your standard computers; they come equipped with specialised processors called Neural Processing Units (NPUs) designed to run AI tasks directly on the device rather than in the cloud. This allows for faster, more secure, and personalised AI experiences. After years of anticipation, 2026 is seen as the crossover year where AI PCs move from a niche category to the mainstream. Some analysts project that AI-advanced PCs could capture nearly 60% of global shipments this year. This transition is being accelerated by the end of support for Windows 10, which is pushing businesses to refresh their aging hardware fleets with future-proof, AI-capable machines.
Smartphones: A Story of Decline and Premiumisation
The smartphone market presents a more complex picture. While overall IT spending is booming, the smartphone segment is facing its steepest annual contraction in history, with some forecasts predicting a nearly 14% decline in shipments for 2026. This downturn is attributed to a severe memory crisis that has driven up component costs, alongside geopolitical tensions adding new cost pressures. However, despite selling fewer units, total spending remains high due to a flight to quality. Consumers are holding onto their devices for longer and, when they do upgrade, are often choosing more premium models. Apple, in particular, is forecast to have a defining year, increasing its market share as it successfully navigates supply chain issues and captures high-end demand. The growth of innovative form factors like foldable phones also contributes to higher average selling prices.
How This Impacts the Indian Market
For India, these global trends are highly relevant. The push towards AI PCs will likely see strong adoption in the corporate sector as businesses look to leverage new AI tools for productivity. As a major smartphone market, India will feel the effects of both the shipment downturn and the shift towards premium devices. While budget-friendly smartphones will remain crucial, the upper-middle and premium segments are likely to see increased competition and innovation. The demand for advanced display technologies like OLED and high-refresh-rate screens, often driven by gaming and media consumption, will continue to grow. Furthermore, the government's focus on building domestic semiconductor and electronics manufacturing capabilities could play a significant role in navigating the global supply chain pressures and price hikes affecting the industry.
