US currency forces prices up and spending down
Worldwide IT spending will contract 5.5% this year dropping to $3.5 trillion, compared to $3.7 trillion last year.
In its Q2 2015 update the ‘Gartner Worldwide IT Spending Forecast’, said the fall is "purely mathematical", with the sector to rise 2.5% in 2015 in ‘constant currency’.
Communications services will continue to be the largest IT spending segment in 2015 with spending at nearly $1.5 trillion.
The dollar value put hardware prices up in countries with currencies that have weakened against the American currency.
Hardware buyers are delaying purchases or buying less expensive items. The purchase of cloud storage, instead of purchasing storage hardware, is also on the rise, according to the research firm.
Data Centre Systems, network, storage and servers spending was $142bn in 2014 with a forecast of $136bn for 2015 (down 3.8%).
Enterprise Software sales were $314bn in 2014 and forecast to drop $1.2% to $310bn. IT Services spending was $955bn last year and expected to drop 4.3% to $914
IT services spending is forecast to decline in real terms, as using automated tools to provide services is driving prices down.
Windows 10 is predicted to drive a sales bubble in the PC market in late 2015 and 2016, but the installed base of PCs will continue its long-term decline.
The device market will keep being dominated by the mobile phone sector, which forecasters predicting growth in Apple phones, especially in China.
Software spending is flat as a competitive market means vendors are unwilling to risk losing sales by price increases.
John Lovelock, Gartner’s head of forecasting, said: "The forecast has dropped slightly since Q1, the primary reason being the rise in prices due to US currency rise and the resulting decline in units sales. Currency effects will be with European through 2017.
"Most price increases will be in place by the end of this year, allowing price stability through 2016 and prices declining back to traditional levels starting in 2017."