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Global OEM Factory Revenue Flat For Q4: IHS iSuppli

11/04/2012 07:00:00 PM Eastern

EL SEGUNDO, CALIF. — It’s not ex- pected to be an exceptionally jolly holi- day season this year for consumer elec- tronics, with OEM factory revenue for the global CE market expected to rise just 1.3 percent, according to IHS iSuppli.

Brands will focus on low pricing this season, the market research firm said, hoping to draw in consumers who’ve been impacted by weak global econom- ic conditions.

Global consumer electronics OEM factory revenue this year will rise to $361 billion, up from $356 billion in 2011, according to the IHS iSuppli Home & Consumer Electronics Service. Revenue during the fourth quarter will amount to $98.5 billion, which is up a scant 2.2 percent from the prior-year figure of $96.4 billion.

A lack of impressive products is like- ly to blame for the lack of impressive growth. “Amid weak economic condi- tions, along with a lack of compelling new products, electronics brands have little choice but to slash prices to gain the attention of buyers,” said Jordan Selburn, IHS consumer platforms se- nior principal analyst. “While consumer electronics brands and retailers always offer bargains for Black Friday, this year is likely to bring extremely steep price declines. The result is marginal growth in revenue for consumer electronics manufacturers in 2012.”

Not surprisingly, bargain hunters will rule the day. Any new products that do make appearances (such as large-sized OLED or 4K TVs) will likely not generate strong sales because of their high price tags.

“In a down economy people want bargains,” Selburn added. “Because of this, the consumer electronics industry in 2012 in general is focusing on opti- mization, rather than innovation. Instead of delivering totally new products or ma- jor new features, consumer electronics makers are improving their current of- ferings by making them smaller, more power efficient and — most importantly — cheaper.”

IHS includes 42-inch 1080p LCD TVs for just $200 in its suggestions for pos- sible Black Friday deals, as well as 55- inch 3D LCD TVs for less than $800. This is down from the usual $500 and $1,400 price tags, respectively, it said. Discounted Blu-ray Disc players make may an appearance for $40, down from the usual $65 range.

“At those price points, Blu-ray players and even 42-inch televisions almost fall into impulse-buy territory for some con- sumers. These are the kinds of deals that will get shoppers out on Black Fri- day,” said Selburn.

Although growth is expected for the global CE market, with revenue expect- ed to inch to $98.5 billion in the fourth quarter, from $97.63 billion in the third quarter, just a few categories will be able to take responsibility for it. Most product categories will actually see de- clines for the year, IHS said.

Shining stars will include LCD TVs, will see an increase in revenue, despite an expected decrease in unit shipments for the year, IHS said. Higher average selling prices for feature-rich sets sold earlier in 2012 models will allow revenue to rise for the year, it added.

Other categories that IHS named as growing ones include digital set-top boxes and consumer appliances.

Conversely, plasma TVs, rear-projec- tion TVs, analog CRT TVs, video game consoles, digital still cameras, DVD and Blu-ray video recorders, portable media players and MP3 players, personal and portable stereos, home audio system components, camcorders and e-book readers will all likely decline.

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