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Smartphone, tablet revenue to surpass entire CE market

Posted: 29 Oct 2013     Print Version  Bookmark and Share

Keywords:smartphones  tablets  consumer electronics  original equipment manufacturer  IHS 

Global factory revenue for smartphones and tablets this year will rise to become larger than revenue for the entire consumer electronics (CE) market—the first time this has ever occurred. According to the market research firm, worldwide original equipment manufacturer (OEM) factory revenue for media and PC tablets and for 3G/4G cell phones will amount to Rs.22.28 lakh crore ($354.3 billion) in 2013.

This will be 3 per cent more than the Rs.21.66 lakh crore ($344.4 billion) for OEM factory revenue for the CE market, a broad category that includes hundreds of product types, including televisions, audio equipment, cameras and camcorders, video game consoles and home appliances. The massive CE market historically has dwarfed the tablet and smartphone segment, with CE 30 per cent larger just last year.

"Consumer demand for smartphones and tablets has been flourishing in the past few years while sales growth for CE products has languished in the doldrums," said Randy Lawson, senior principal analyst for semiconductors at IHS. "The fact that these two product categories are on their own able to generate more OEM factory revenue than the entire CE market illustrates the overwhelming popularity of smartphones and tablets. Meanwhile, the CE market has gone flat, with many of the major product types experiencing either low growth or declines in revenue during the past six years."

"Consumers simply are finding more value in the versatility and usefulness of smartphones and tablets, which now serve as the go-to devices for everything from phone calls, to photography, to navigation, to media playback, to fitness tracking. Because of this, smart mobile platforms are displacing sales of CE products such as digital still cameras, camcorders, GPS and media players."

The rise of the smartphone and tablet markets has been remarkable, with OEM factory revenue expanding by a factor of nearly nine to Rs.22.28 lakh crore ($354.3 billion) in 2013, up from Rs.2.59 lakh crore ($41.2 billion) in 2007. Revenue this year will rise by a robust 31 per cent.

However, the fast pace of growth is slowing, with revenue in 2014 increasing by only 18 per cent to reach Rs.26.33 lakh crore ($418.6 billion). And with CE factory revenue declining in 2014, smartphones and tablets will expand their revenue lead dramatically, rising to a 22.2 per cent advantage compared to the entire consumer electronics market. This gap will continue to widen and will reach nearly 35 per cent in 2017.

On the other hand, of the 20 distinct CE product segments, 14 will suffer a decline in their compound annual growth rates (CAGR) from 2007 through 2013. Some large product segments like LCD TVs are seeing growth in their revenue during that period. Even so, the CAGR for LCD TVs will be less than 10 per cent, representing a major slowdown from the 83 per cent rise seen during the previous six-year period from 2001 through 2007—the era of the global flat-panel TV replacement wave.

With LCD TV revenue starting to decline in 2014, the overall CE market is set for a long-term contraction as well. By the end of 2017, CE OEM factory revenue will slide to Rs.20.57 lakh crore

($327 billion), down 5 per cent from the total in 2013.

For more statistics and forecasts, click here.





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