IT spending outstrips consumer electronics in Q1

A sharp growth in smartphones sales in the first quarter that bolstered growth in the telco sector was counteracted by a steep decline in traditional handset sales, the latest GfK Australia report has found.

The telecoms sector grew 3.9 percent in the first quarter compared to the same period last year. Traditional mobile handsets declined by 45 percent but 149 percent growth in smartphone spending "was more than enough to counteract the decrease", said the report.

IT enjoyed modest growth thanks to the "back to school" period. A mixed quarter for the value sales of notebooks led to a modest overall growth of 5.6 percent for the IT sector.

January school sales were strong, with a growth of 11.6 percent growth on January 2009.

Value sales in March, however, showed the first year on year decline for notebooks - down 4.1 percent - since the launch of the category, said GfK.

Desktop PCs performed consistently well with a quarter growth of 15 percent, thanks to a popularity in all-in-one models.

Storage was up 13 percent and multi-function printing devices were up 2 percent.

The same could not be said for other technical consumer goods spending in the first quarter of the year.

GfK pointed to the absence of government stimuli and the effect of four interest rate rises to have finally had an impact on technical consumer goods spending.

Compared to the same period last year, spending in quarter one 2010 has declined by 1.6 percent, the first decline recorded since the launch of the GfK TEMAX Australia report in Q3 2008.

Domestic appliances took the worst hit, but consumer electronics also failed to deliver growth.

Consumer electronics posted a year on year decline of 2.2 percent in the first quarter one, the first decline since the launch of the TEMAX report in 2008.

Bucking the overall trend was the dominant flat panel TV category with a modest 3 percent growth.  

GfK said it is unlikely that spend in the second quarter will surpass that of 2009.

With the up-coming World Cup, coinciding with the take-up of new TV technologies (3D, LED, IPTV) there is cause for some optimism, however.