Gartner Research

Market Trends: Can Device Vendors Build a Sustainable Digital Business Model Based on New, Recurring Revenue Sources?

Published: 28 February 2017

ID: G00318953

Analyst(s): Werner Goertz

Summary

Technology strategic planners for device vendors should leverage digital business opportunities and the economics of connections to enhance profitability, lower the price of devices for end users and increase market share.

Table Of Contents

Introduction

Market Trend

  • Personal Device Market Growth Is Flat
    • The Economics of Connections Drives Value for Device Vendors
    • Recurring Revenue Market Models
    • Model 1: Use Direct Subsidies From Ecosystem Partners to Boost Hardware Margins
    • Model 2: Derive Recurring Revenue From Subscription Partnerships
    • Model 3: Collect Transactional Revenue From Advertising Placements and Freemium Models
  • Regional Trend
    • Emerging Market Buyers Access Government and Municipal Portals Through Devices

Contrarian View

  • Payment Plans and Subscription Models Lower Acquisition Costs

Vendors to Watch

  • Amazon
  • LeEco
  • Centralite
  • People Power

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