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International CES Wrapup

International CES Wrapup
by Bill Jewell on 01-15-2014 at 4:00 pm

Semiconductor Intelligence attended the International CES last week in Las Vegas, Nevada. A wide variety of consumer electronics devices were displayed at the conference. These ranged from:

· Fascinating – but is it practical? (personal robots, drones)
· Exciting – but when will it be cheap enough for the mass market? (UHD TV, glasses-free 3D TV)
· Potential hit – devices with near term growth prospects (wearable fitness/health devices)
· Mundane – incremental improvements in established devices (tablets, smartphones)
· Questionable – does anyone really want or need this? (Internet control of lights & appliances)

Despite the wealth of new technology introduced, the near term prospects of the consumer electronics market are weak. Steve Koenig, Director of Industry Analysis of the Consumer Electronics Association (CEA) presented the 2014 forecast by CEA and market research company GfK. The presentation is available at:

http://www.ce.org/Blog/Articles/2014/January/RESEARCH-What-Do-We-Expect-2014.aspx

CEA & GfK expect the worldwide consumer electronics market to decline 1% in 2014 measured in U.S. dollars. This follows a moderate 3% growth in 2014. The only product categories expected to show any significant growth in 2014 are smartphones (+6% vs. 27% in 2013), tablets (+9% vs. 30% in 2013) and video game consoles (+21% vs. -9% in 2013). Smartphones have been a strong growth category for the last few years, but have led to a decline in non-smart or feature mobile phones. The strong growth of tablets has contributed to a decline in PC sales. Video game console growth in 2014 is due to the introduction of the Sony PlayStation 4 and Microsoft Xbox One in late 2013. Despite the advances in LCD TVs such as Ultra High Definition (UHD or 4K) and glasses-free 3D, overall LCD TVs are expected to decline 2% in 2014 after 3% growth in 2013.

In terms of regions, developed countries (U.S., Western Europe, Japan, South Korea, Taiwan, etc.) are forecast by CEA/GfK to see a 4% decline in consumer electronics sales in 2014 after a 2% decline in 2013. Developing countries (China, India, Latin America, Eastern & Central Europe, Russia, Middle East, Africa, etc.) should grow 2% in 2014, a significant slowing from 9% in 2013. According to CEA, developed countries accounted for 60% of consumer electronics sales in 2010. The percentage is expected to decline to 50% in 2014 and continue to decline in future years.

Two of the emerging consumer electronics devices we focused on at CES were Ultra High Definition (UHD) TV and wearable devices for health and fitness. Although these two categories have potential to drive growth in consumer electronics in the future, what is the near term outlook?


All of the major TV suppliers displayed UHD TVs with screen sizes of 85 inches (diagonally) and up. Several UHD TVs are available on the market.
Bestbuy.com lists major brand UHD TVs at about $5,000 for 65 inches and $3,000 for 55 inches. By comparison, HDTVs sell for about $1,500 for 65 inches and $750 for 55 inches. The high prices and limited UHD content will limit sales to early adopters for several years. IHS Inc. expects UHD TV sales to hit 10 million units in 2014, up from 1.5 million in 2013. Sales are forecast to hit 38.5 million units in 2018, but will be only 16% of the total LCD TV market.

Wearable devices should have near term impact on the consumer electronics market. Fitness and health are the major drivers of wearable devices. The 2014 market for wearable devices is expected to be about $5 billion. Forecasts for the 2018 market size range from $13 billion from
BI Intelligence to $35 billion from the Industrial Economics and Knowledge Research Center (IEK). Wearable devices are a new area of consumer electronics and should drive growth without displacing sales of other electronic devices.

More Articles by Bill Jewell …..


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