The amount of money spent on IT hardware, software and services will fall this year as companies react to the rising value of the dollar, according to a new report from Gartner.
Gartner's Worldwide IT Spending Forecast said that the increasing value of the US currency will push up the price of technology, and lead some organisations to reconsider spending patterns.
The analyst firm is not talking about a "market crash", but a decline across all areas.
"We want to stress that this is not a market crash. Such are the illusions that large swings in the value of the US dollar versus other currencies can create," said John-David Lovelock, a research vice president at Gartner.
"However, there are secondary effects to the rising US dollar. Vendors have to raise prices to protect costs and margins of their products, and organisations and consumers will have to make new purchase decisions in light of the new prices."
Overall spending in the market, which includes that by businesses and consumers, will drop by 5.5 percent. Communications services will be the worst hit with a 7.2 percent decline, while enterprise spending will slip by 1.2 percent.
Mobile phones will continue to sell consistently, but PC and tablet spending will decline owing to an expected 10 percent increase in prices and a large quantity of non-Windows 10 inventory that needs to be sold.
The decline sounds bad, but business will remain reasonably good. The communications services industry will still pull in $1.5tn, according to Gartner, despite being hit by rising prices and increasing competition.
Enterprise market spending appears to be consistent owing to strong sales of servers and data centre hardware. Gartner reported a decline in complex installations, and buyers are tending to spend on easy-to-install, out-of-the-box solutions.
"IT activity is stronger than the growth in spending indicates. Price declines in major markets like communications and IT services, and switching to 'as-a-service' delivery, mask the increase in activity," added Lovelock.
Gartner told V3 last year that the balance of power is shifting towards buyers as vendors struggle to differentiate their services.
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