Smartphone hunger pushes electronics revenues to $204bn

Revenues for the consumer electronics (CE) industry are projected to grow nearly three per cent, reaching a new record-high of $209.6 billion (Sh18 trillion) in 2013, says the semi-annual forecast released Wednesday by the Consumer Electronics Association (CEA).

The projection also shows the 2012 world revenues hit $204 billion (Sh17 trillion), up five per cent the previous year.

“CEA’s forecast once again confirms that CE products play an increasingly indispensable role in consumers’ lives,” said Steve Koenig, CEA’s director of industry analysis.

“Consumer adoption of smartphones and tablets continues to expand briskly, as mobile connected devices take centre stage in connected, digital lifestyle.”

The forecast was released at this year’s International CES event in Las Vegas. The event which started on Tuesday brings together electronic manufacturers across the globe to display new innovations.

“There is no better place to see innovation than at the International CES, and the products on display this week will propel the CE industry to record levels in 2013,” said CEA president and CEO Gary Shapiro in a press release.

The growth of the industry will be driven by uptake of tablets, set top boxes —the gadgets that converts analogue TV signals to digital as countries move to the new platform ahead of global deadline of 2015.

Unit sales of tablets are projected to reach 116 million this year, up 45 per cent from 2012 when 80 million tablets were sold to dealers. Tablet sales are expected to surpass $37 billion (Sh3.2 trillion) this year, up from $31 billion in 2012.

Smartphones continue to be the primary revenue driver for the industry, a trend that is expected in 2013.

Unit sales of smartphones are projected to reach 130 million this year, up from 111 million in 2012, while revenues are seen reaching $37 billion this year (Sh3.2 trillion), up from $33 billion (Sh2.8 trillion) in 2012.

Digital media

Laptop/notebook computer sales will continue to rise as 26 million units are projected to be sold this year, accounting for $17 billion (Sh1.47 trillion) in revenue.
Network-enabled digital media set top box shipments will hit 7.4 million units, a gain of 13 per cent over 2012 according to the projections.

This is expected to be driven by the migration of analogue broadcasting to digital. Kenya needs four million set-top boxes.

The forecast also notes that there are a number of bright spots within the television category that are helping to drive overall industry growth, despite total unit sales of displays falling slightly in 2013.

Both unit sales and revenues for LCD displays are projected to increase this year.

A record-high 30.4 million LCD TVs will be shipped to dealers in 2013, resulting in more than $15 billion in revenues. Innovations continue to grow and sales of TV sets with 3D functionality will increase 39 per cent to more than 5.7 million units in 2013.

Internet-connected displays will also see strong growth this year, with unit sales reaching 12.3 million, up from 9.2 million in 2012.

Consumers are also looking for gadgets with built-in Wi-Fi and Internet browsing when purchasing a new HDTV, which trail only high-quality audio and video as the most important purchase factors.

About a third of consumers plans to purchase a new HDTV within the next 12 months.

Another way many consumers are experiencing Web-enabled content for HDTV is through a second screen on a portable connected device. Social networking is the most common activity on the second screen.

Among HDTV owners who also possess a tablet, two-thirds (67 per cent) use tablets for social networking while watching TV.

Among HDTV owners who also own a smartphone, more than half (58 per cent) are using a social network on the device while watching television.

“We are living in an app-dominated world, whether it’s on your smartphone, tablet or television,” said Kevin Tillmann, senior research analyst at CEA.

“Consumers want access to their apps at all times and they will use whatever device, TVs included, that offer the best and most convenient user experience.”

As 3D becomes a more common feature on high definition TVs sold in the US, consumers have not only become more aware of the technology, but, according to the study, they are also beginning to embrace it.

Historical trends

Audio: Soundbar shipments are projected to increase 22 per cent to 2.2 million units.

Auto-sound: Aftermarket head units supporting Internet radio are projected to see sales nearly double, surpassing two million units.

Shipments of compact system cameras with interchangeable lenses are projected to grow 22 per cent to 1.1 million units.

The US Consumer Electronics Sales and Forecast is published in January and July. It was designed and formulated by CEA as a comprehensive source of data, forecasts, consumer research and historical trends.

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