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Global Tech Spending Seen Slipping 1 percent in this year

This year, the Consumer Electronics Association predicts that global spending on technology will fall 1 percent to $1.06 trillion as the lower average selling price of smartphones and tablets compensate unit growth in markets like China.

The decline is off the peak of $1.07 trillion estimated this year.

Sunday, January 6, on the opening of the annual International CES gadget show, the association’s director of industry analysis Steve Koenig issued the forecast.

The decline doesn’t mean that there would be a smaller amount consumer appetite for what Koenig called the “dynamic duo” of tech gadgets. People would still spend on smartphones and tablets; it is still expected to account for some 43 cents of every dollar spent on technology this year.

However the average price of smartphones, for instance, will fall from $444 in 2010 to an estimated $297 this year, regardless of the number of smartphones sold increasing to 1.21 billion up from 1.01 billion.

“These lower-end devices are what’s required to penetrate most deeply into these emerging markets,” he said.

Smartphones and tablets stay as the key drivers of technology spending to the point that they are outstanding into other categories of devices like point-and-shoot cameras, video cameras, portable GPS devices and handheld gaming devices.

On the other hand, within other categories of devices there are also some growth in the sale on some devices, such as wearable devices.

Smartwatch sales are expected to be 1.5 million units globally this year, up from 1 million in 2013, said Shawn DuBravac, the association’s chief economist.

“This is a very nascent market. We’re still looking for that killer application for that particular device,” he said.

Also what is seen to be taking off is the Ultra HD televisions, which roughly quadruple the number of pixels of a high-definition set.

There were 60,000 such sets sold in the U.S. alone last year, a number expected to hit 485,000 this year, the association said. However, that’s still a small number compared to the nearly 40 million TVs sold in the U.S. each year, DuBravac said.