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iSuppli: Global OEM Revenue To See Slight Bump

1/27/2010 01:40:17 PM Eastern
El Segundo, Calif. - Worldwide consumer electronics revenue to original equipment manufacturers (OEMs) is forecast to rise 1.6 percent to $317.3 billion in 2010, to counter the 6.7 decline to $312.3 billion seen in 2009, according to a new report from market analysts iSuppli.

Much of the revenue growth is expected to come from improving sales of LCD TVs, digital set-top boxes (STBs) and appliances, according to iSuppli.

The firm said the 6.7 percent fall in CE OEM revenue in 2009 represented the market's first annual decline since the 1.6 decrease during the dot-com bust year of 2001.

"Sales of consumer electronics rebounded in the second half of the year, setting the stage for renewed growth in 2010 and beyond," stated Jordan Selburn, iSuppli principal analyst. "One major bright spot for consumer electronics in 2009 was the LCD TV segment, which achieved 4.2 percent revenue growth due to incentives in China and the increasing sales of LED-backlit sets. The LCD TV market is set to extend its winning streak in 2010 as stabilization in the global economy and declining prices prompt consumers to keep buying."

Global LCD TV OEM revenue in 2010 will increase to $75.5 billion, up 5 percent or $3.6 billion, from $71.95 billion in 2009, the largest dollar increase of any consumer electronics segment for the year, iSuppli said.

Digital STBs, which will see OEM revenue rise to $18.2 billion in 2010, up $1.9 billion - or 11.6 percent - from $16.3 billion in 2009, represent the next largest growth area.

"Strong sales of premium boxes will propel revenue growth in the digital STB market," Selburn said. "Consumers are snapping up premium STBs that support advanced features like high definition and digital video recording."

iSuppli said sales are particularly strong in the Asia-Pacific region due to the continued expansion of digital infrastructure.

Global OEM revenue from appliances such as washing machines, ovens and refrigerators is expected to rise to $76.99 billion in 2010, up 2.1 percent or $1.9 billion, from $75.4 billion in 2009-making it the third largest dollar growth area for the year.

"Increases in sales are being driven by emerging economies, where more households are buying basic appliances, such as washing machines," Selburn noted. "After a 4.6 percent decline in 2009, this area will rebound in 2010 as global governments continue their stimulus efforts."

Other forecasted revenue growth categories include DVD video players, PMP/MP3 players, digital photo frames and handheld video games.

Meanwhile, in contrast to the gains being made in the LCD TV market, global OEM revenue from plasma television is expected to contract by $3 billion in 2010, iSuppli said. Plasma television revenue is set to decline to $9.2 billion in 2010, down 24.9 percent from $12.2 billion in 2009.

"Continued cost reductions are making LCD panels more cost competitive, hurting sales of plasma sets," Selburn said. "Furthermore, some of the leading suppliers no longer foresee plasma generating sufficient sales growth to continue investing in the technology."
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