Mobile Connected Devices Boosting Sales of Consumer Electronics

The consumer electronics industry will have stronger than anticipated growth in 2011, according to the semi-annual industry forecast released on Monday by the Consumer Electronics Association.

The industry is estimated to surpass $190 billion in overall shipment revenues this year, a growth rate of 5.6 percent, which is higher than the previous projection from January. The U.S. Consumer Electronics Sales and Forecast (July 2011) also projects industry shipments will grow in 2012, reaching an all-time high of $197 billion.

"Innovation continues to drive the electronics industry to record levels, even in the face of declining economic growth overall," said CEA President and CEO Gary Shapiro. "Newer, innovative product categories, like tablets, not only meet consumer demand but also help bolster our industry and strengthen the overall American economy."

CEA expects the surging sales of mobile connected devices to be significant enough to push the overall industry higher than previously projected:

• Tablet computers are projected to grow 157 percent in 2011, with more than 26.5 million units being shipped to dealers and resulting in $14 billion in shipment revenue.
• Smartphone sales will also see major growth this year and will continue to be the primary revenue driver for the industry. Smartphone unit sales will climb an estimated 45 percent and reach more than $23 billion in industry revenue.
• eReader unit sales will double this year, with more than 16.5 million units being shipped, resulting in $1.8 billion in revenue.

"One year ago, tablets were a new and unproven market, and now they, along with other mobile connected devices including smartphones and eReaders, are leading the entire industry to positive growth," said Steve Koenig, CEA's director of industry analysis. "The revenue boost from these innovative products is undeniable as a number of other CE segments are reaching maturity and sales are naturally declining."

CEA estimates 88 percent of U.S. households own at least one digital television. Given this high penetration rate, sales of digital displays are expected to fall this year. However, this category remains an important contributor to the industry's bottom line with 2011 revenues topping $18 billion.

Network-enabled displays, however, are a growth segment, with an estimated 10.4 million network-enabled displays shipping to dealers this year. 3D displays will also see better-than-projected growth as 3D becomes a standard feature in displays and is incorporated into more sets across product lines. An estimated 3.6 million 3DTVs will ship in 2011, up from a projected 1.9 million units in January.

Despite slower display sales, consumers are continuing to upgrade their in-home theater experience, and audio sales are rebounding this year. Soundbars are leading the way with 2.4 million units expected to ship in 2011, an increase of 250 percent from last year.

In-vehicle technology is also poised for a strong year, as technology in new vehicles is resulting in double-digit growth. As consumers seek to integrate existing devices and content into their vehicle, such as Internet radio, automotive entertainment technology revenues are up more than five percent.

Digital cameras will also have a healthy year with unit shipments growing three percent.

(Source: Consumer Electronics Association, 07/18/11)