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CES: 2012 Global CE Spending Fell 1%; Seen Up 4% In 2013

This article is more than 10 years old.

Time for session #2 in the preliminary round of festivities taking place at the Mandalay Bay in Las Vegas just ahead of this week's International CES. The topic : The State of the Global CE Industry.

Also see my post on the first session, which focused on emerging trends. And for full Forbes CES coverage throughout this week, see the special section of our Web site at forbes.com/CES.

This session will be led by Steve Koenig, the Consumer Electronics Association Director of Industry Analysis, along with his pal Steve Bambridge from GfK Boutique Research.

Here are some of their projections:

  • They had projected 4% growth in consumer devices for this year; but most major markets saw GDP drops in 2012; and provisional global spending number for 2012 is down 1%. They are projecting 4% growth for 2013.
  • Developing market will lead return to growth - maure markets about 1% growth, developing markets about 9%. Europe is a concern; flat to down. Developed Asia also not growing much. Overall 2012 developed market revs were down 4%.
  • 2013 growth drivers by geography: China, India, Brazil, Russia. Countries to watch include Indonesia, Philippines and Sub-Saharan Africa.
  • GDP growth in Brazil this year will be only 1%.
  • 2013 causes for concern: Slow growth in Europe; maybe slightly positive growth, or maybe not. Low growth in Japan, with stagflation continuing theme. About 2% U.S. growth. To watch: Argentina, with inflation, trade barriers and other issues.
  • Outlook by geography: Western Europe, down 1%, after down 7% in 2012. North America seen up 3% this year, after up 1% last year. Developed Asia sees up 2%, after down 7% last year. Emerging Asia seen up 9% this year after 7% last year. Latin America seen up 5% after down 11% in 2012. Middle East and Africa seen up 12%, after up 6% in 2012. Central and Eastern Europe seen up 7%, after flat in 2012.
  • They note that U.S. could actually come in negative for 2012, given weak holiday season.
  • Tablets and smartphones dominate the landscape at this point. Notebook sales are contracting in Europe; tablets growing triple digits. Clearly correlation between tablet growth spikes heading into holidays and a lack of interest of purchasing notebooks in the same period.
  • By January 2013, they project U.S. household smartphone penetration of 55%, with tablets at 44%. In 2012, led tablets as the top two contributors to CE industry; for 2013, they are seen neck-and-neck - far ahead of all other categories, including video games, TVs, notebooks.
  • In 2013, smartphones and tablets will be around 40% of total CE spend. (The Steve Jobs revolution lives.)
  • We continue to see wholesale collapse of some product categories that are seeing their functionality absorbed by tablets and smart phones. Cameras, portable gaming players, and many others.
  • New tablets and strategies enter the market: Google Nexus 7, Google Chromebook, Microsoft Surface, iPad Mini.
  • Windows 8 is spurring hardware innovation in notebooks. Smartphones, tablets, notebooks continue to collide. Clear shift: could see growth in convertibles/hybrids.
  • Lower-priced tablet model adoption in emerging markets is boosting the overall growth rate.
  • In smartphones, emerging markets now account for bulk of the spending - 58% expected in 2013, versus 42% for developed markets.
  • Emerging market phone sales now 40% smartphones; heading to the 80% smartphone market share seen in mature markets.
  • Mobile devices are cannibalizing video game hardware sales.
  • CEA projects growth this year for tablets, smartphones...and not much else. (Modest growth seen for video game consoles, actually.) CEA ses 25% growth in tablet revenue growth, 22% growth for smartphones. Feature phones seen down 21%. Plasma TVs down 23%. LCD TVs seen down 2%. Include notebooks, and that's more than 50% of global CE spending.
  • On TVs: Ultra high def and increasing screen size is the story on the show floor. In U.S. market, jumbo screen sizes are growing. Sales of small TVs cratering; who needs them when you can watch on tablets/notebooks. Jumbo TVs now approaching 10% of total U.S. units. Large size TVs growing 200%-300%.
  • Prediction: Ultra HDTVs will sell only 1.4 million units in U.S. in 2016 - only 5% of overall sales.