As mobile devices become more a part of everyday human life, the manufacturing costs for those products have dropped significantly. The prices for mobile devices have followed accordingly, and market watchers now predict that the low-cost smartphone and tablet markets will be the drivers of industry growth in the coming years.
At the same time, service providers are also encouraging customers to upgrade their devices at an ever-faster pace. T-Mobile this summer announced its “Jump!” plan, allowing customers to upgrade their smartphones more than once every year. Other major U.S. mobile providers have followed suit.
All of this means that manufacturers are now having to deal with quick turnarounds on new products, with the lifecycle of new devices dropping rapidly. A new DigiTimes report today states that the average lifecycle of new IT products has now dropped to just three months. This is only half of the six-month lifecycle that many devices have traditionally had. The report’s unnamed “sources from the upstream supply chain” are cited as saying component manufacturers are now having to deal with shorter-term supply orders, a major change from the long-term orders they had been used to receiving.
The report blames the falling lifecycles on quickly-shifting consumer purchasing habits, as well as “fierce” competition among device manufacturers. It also predicts that the new paradigm might force those same manufacturers to reevaluate their component supply strategies in the near future.