CE Sales Should Pass $200B In '12

By Steve Smith -- TWICE, 1/10/2012

LAS VEGAS - 2012 will mark the first year that factory sales of consumer electronics will exceed $200 billion annually.

Today Gary Shapiro, president/CEO of the Consumer Electronics Association (CEA) will announce during his keynote at the Venetian, Level 5, Palazzo Ballroom at 8:30 a.m. that projected 2012 sales will be $202.4 billion, up 3.7 percent over 2011's estimated $195.2 billion, which represents a 7.9 percent gain.

In a pre-show briefing with the Official Daily of CES Steve Koenig, director, industry analysis, went over some of the product trends that should take CE factory sales over the $200 billion.

In a trend that began in 2011 Koenig said, "There will be strong opportunities for mobile products - tablets and smartphones." For instance tablet factory sales should be $18.3 billion this year, in the "home information technologies and securities" category of the chart at right. And smartphones will generate $33.7 billion in factory sales in the "portable communication" category.

"The Ultrabooks at CES... are the unknown at this stage," with plenty of new products being introduced that will compete against tablets, Koenig said. 

He also noted that the trend towards mobile payments will be big this year along with "a raft of quad processor HD smartphones."

Factory sales of TV sets and displays should reach $17.2 billion in 2012, down 6.5 percent, even though unit sales should increase. The introduction of Apple TV, more than likely in the larger screen sizes sometime later this year, will have a "serious impact on incumbent suppliers," Koenig said.

"Anyone competing in that space will be adversely affected," he noted. "If you assume [Apple taking] a 10 or 15 percent market share that means for existing suppliers they will be fighting for a smaller slice of a smaller pie."

For Apple, since it is a "premium brand selling at a premium price point... won't matter. As we have seen the Apple buyer will pay for the product and pay for the experience. [The price] will not be a stumbling block."

Another category worth watching in 2012 will be in-vehicle technologies which should grow by a projected 8.7 percent.

Koenig noted, "Car internet radio and streaming audio for the aftermarket is something to watch, as well as app-enabled head units. They could be game changers."

He added, "Connectivity and having apps is significant will help replicate the user experience they have with smartphones in the vehicle. Consumers want consistent experiences with their devices... at home, on the go, or in the car. They want the same experience and be able to access same data and entertainment" in all three places.