London – Global consumer electronics sales rose 4.5 percent in 2014 to a factory-level $707 billion, driven by 24 percent growth in cellphone and tablet sales, Futuresource Consulting estimates.
The CE business will grow to $733 billion by 2018, with growth again due primarily to cellphones and tablets, the company said. The cellphone/tablet market, however, will peak in 2017 at $343 billion because of falling average selling prices.
“The smartphone market is now the largest segment of the total CE market, followed by infotainment devices (PCs, tablets, e-readers, networking devices and peripherals) and television displays,” the company noted.
The TV segment will continue to grow through the forecast period to hit $163 billion in 2018, and automotive electronics -- including OEM and aftermarket entertainment, telematics and personal navigation devices -- will grow at a 4.1 percent CAGR through 2018 to hit $37 billion.
The research company also determined that emerging markets accounted for more than half of CE spending and that China’s share of worldwide CE spending hit 22 percent in 2014, matching North America’s share for the first time.
Wearables posted strong growth in 2014 to reach $8 billion, and Futuresource expects smartwatches to drive stronger growth in 2015. However, the company said, “questions remain about the longer-term viability of the market when the usage model and main applications of wearable devices [are] still unclear to consumers.”
Home automation will also be a key driver of growth in 2015, but “some of the biggest opportunities within this space are more service-driven, with opportunities for CE vendors again being less clear,” the company said.
In the mobile market, Chinese vendors are challenging the competition, Futuresource said. “Chinese vendors such as Lenovo, Huawei and Xiaomi are driving volume growth with sales of low-end handsets and are eating into the profits of more established brands.” Combined with Apple’s and Samsung's dominance of the high end, “the rapid emergence of low-cost Chinese vendors has marginalized other non-Chinese mobile vendors like Nokia, Blackberry, Sony, HTC and Motorola,” the company concluded.
In mobile and traditional CE, “China's tech giants are starting to challenge at the world level, leveraging a domestic market which is now the world's largest, with increasingly broad access to leading edge technologies and Western brand acquisitions like Motorola and Philips,” the company noted.
As for Japanese companies, a weaker yen has provided “some relief,” but most are still losing money in consumer electronics, and widespread restructuring and industry consolidation continues.”