LAS VEGAS — The CE industry’s performance will remains fairly flat in 2014, reported the Consumer Electronics Association (CEA) at International CES earlier this month, with some growth expected in the U.S. market in 2014, but a slight decline in global revenues.
CEA president Gary Shapiro, in his opening day keynote address, said revenues for the U.S. CE industry are projected to grow 2.4 percent in 2014, reaching a new record high of $208 billion, “driven by product categories that didn’t exist in a meaningful way five years ago,” such as Ultra HD TVs, 3D printers and wireless health devices.
These categories among others are cumulatively expected to contribute more than $6 billion to the overall CE industry in 2014. While these emerging product categories represent less than 3 percent of the entire CE industry, they drive 65 percent of total industry revenue growth.
“We are at the forefront of a momentous wave of innovation,” said Shapiro. “The incredible growth that emerging product categories such as Ultra HD TV, wearable electronics and 3D printers will experience this year underscores the significant role new technologies play in the total consumer electronics story. These innovations will take center stage at the 2014 CES this week, and despite a recovering economy, the products on display will push the CE industry to reach new revenue levels in 2014.”
CEA industry analysis director Steve Koenig addressed the global CE market picture with the press before the show kicked off.
CEA is forecasting global technology revenues to shrink about 1 percent in 2014 to $1.055 trillion. Koenig said despite robust ongoing growth in unit sales of smartphones and tablet worldwide, steadily falling average selling prices (ASPs) for both will limit revenue growth.
Unit growth is increasingly dependent on shifts toward developing markets and the low end, so ASPs are declining steeply, Koenig explained. The importance of the low end in driving the growth in emerging markets is reflected in the fact that average smartphone selling prices are declining faster in emerging markets than in developed markets, he said.
While global revenues are expected to decline, the market is anything but stagnant. Emerging markets such as China, Latin America, the Middle East and Africa continue to grow rapidly vs. the more mature CE markets and in 2014 these emerging markets are projected to account for half of all CE sales, the first time the global market has reached equilibrium, Koenig said. That trend should continue as consumer spending on technology in China continues to explode. “You are looking at the end of a U.S.-dominated technology market,” Koenig said.