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IHS iSuppli: CE To Get ‘Connected' Boost

1/25/2011 02:13:24 PM Eastern

El Segundo, Calif. - Global unit shipments of consumer
electronics products will climb 2.6 percent in 2010, partly driven by rising
sales of products that play a role in the connected home and that focus on
usability-rather than technological wizardry-according to new IHS iSuppli
research.

CE product shipments in 2011 are projected to reach 1.60
billion units, up from 1.56 billion in 2010.

"While the 2.6 percent rise in overall shipments this year
is modest compared to last year's 4 percent climb, the expansion is significant
given current economic conditions," said Jordan Selburn, principal analyst for
consumer platforms at IHS. "Amid the continued uncertainties in the global
economy and the high unemployment rate in the United States-the world's largest
market for CE devices-the uptick in sales provides reassurance for the industry
and sets the stage for future growth."

Unit shipment growth will accelerate to 4.4 percent in 2012,
the research firm said.

IHS iSuppli Figure: Global Consumer
Electronics Shipment Forecast (Billions of Units)
               
  2009 2010 2011 2012 2013 2014  
Billions of
Units
1.50 1.56 1.60 1.66 1.72 1.77  
Percentage
Growth
  4.0% 2.6% 4.4% 3.0% 2.9%  

Source: IHS iSuppli, January 2011

CE revenue in 2011 is not predicted to grow by nearly as much
as unit shipments. In particular, the substantial price declines that began in
2010 are expected to continue in 2011 for CE devices such as e-book readers.

Televisions also will be responsible for some of the
contraction occurring in revenue. Although enjoying strong sales, television
pricing will be eroded by deep discounts from retailers, impacting total CE
revenue.

Other high-volume consumer systems, such as portable media
and MP3 players, will continue to face competitive pressure from rival solutions-such
as smart phones and tablets-which subsume features of the original device, also
depressing CE revenue in the process.

While the concept of the connected home has been around for
some time, the technology with which CE devices communicate with one another as
well as with the outside world has yet to achieve mainstream adoption.

The connected home concept is actually synonymous with the
"connected consumer," an environment in which consumers have access to all of
their media content, anywhere and at any time, seamlessly and transparently
regardless of location or authorized consumption device, whether that device is
a large-screen television, bedroom docking station, media tablet or smart
phone, IHS iSuppli said.

One factor inhibiting broad acceptance is usability. For a
particular consumer technology to enjoy widespread recognition, consumers must
be able to use it-and the product implementing the technology-even without
understanding the mechanism or process involved.

Companies that focus on clear and easy usability instead of
technological fireworks will stand out in the market. Their products will gain
traction, especially as retailers embrace and implement the concept at the
heart of their operations-as Best Buy is expected to do in 2011.

In addition to usability, a major factor for determining the
success of consumer electronics devices will be their long-term future in the
connected home environment.

While the market for a product such as the set-top box may
eventually saturate, the device itself will continue to fulfill key functions
of content access and distribution-assuring its place in the consumer pantheon
for some time to come.

In contrast, the portable media player-while appearing to
have a spot in the digital living room in acting as the primary portable
media-rendering device-is rapidly being superseded by the smart phone and the
tablet, which offer the same music-playing capabilities plus much more, the
survey indicated.

The potential to maintain an existing role in the connected
home explains why some systems-like set-top boxes-will continue to enjoy demand
from CE users, while other devices will slowly become obsolete.

 
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