By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Segundo, Calif. — Combined factory-level sales of 3G/4G cellphones and tablets will outpace sales of traditional CE products on a global basis for the first time in 2013, IHS forecasts.
Cellphones, media tablets and PC tablets will generate $354.3 billion in sales in 2013, or 3 percent more than the CE industry’s $344.4 billion in factory revenue. Only last year, the CE market was 30 percent larger than the cellphone and tablet markets, IHS said.
The research company defined the CE market as including televisions, audio equipment, cameras, camcorders, video game consoles and home appliances.
IHS cited the growing versatility and usefulness of smartphones and tablets, calling them “the go-to devices for everything from phone calls, to photography, to navigation, to media playback, to fitness tracking.” As a result, “smart mobile platforms are displacing sales of CE products such as digital still cameras, camcorders, GPS and media players,” the company said.
The CE market, in contrast, “has gone flat, with many of the major product types experiencing either low growth or declines in revenue during the past six years.”
IHS called the rise of the smartphone and tablet markets “remarkable,” saying factory revenues expanded almost nine-fold to $354.3 billion in 2013 from 2007’s $41.2 billion in 2007.
In 2013, tablet and cellphone revenue will grow 31 percent, but the pace of growth is slowing, the company said. Revenue in 2014 will grow only 18 percent to $418.6 billion.
Nonetheless, with 2014 CE revenue declining, smartphones and tablets will expand their revenue lead dramatically, becoming 22.2 percent larger than the CE industry in 2014 and almost 35 percent larger in 2017, IHS said.
CE factory revenue has been flat during the past few years, having grown less than 1 percent from 2007 to 2013, IHS said. Of the 20 CE categories tracked by IHS, 14 will post declines in their compound annual growth rates (CAGR) between 2007 through 2013. Some large segments such as LCD TV will post revenue growth during that period, but LCD’s CAGR will be less than 10 percent, down from the 83 percent gain that occurred during the previous six-year period from 2001 through 2007.
With LCD TV revenues starting to decline in 2014, the overall CE market “is set for a long-term contraction as well,” IHS said. By the end of 2017, CE factory revenues will slide to $327 billion, down 5 percent from 2013.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.