Throwing cold water on hopes for a powerful tech recovery, economists are predicting that worldwide consumer electronics market sales will be flat at $681 billion in 2010. That compares to a 2 percent decline in 2009, according to the forecast and sales report by the Consumer Electronics Association.
The forecast is surprisingly pessimistic, coming from the industry’s own trade group, considering the fact that the stock market has risen largely on assumptions that a recovery is well under way. But the growth in 2010 will be nowhere near the growth of 2008, when the industry grew 14 percent.
The good news is that certain regions are growing strong, such as Japan, China, and the rest of Asia. But the gains in those areas aren’t enough to offset a decline of 12 percent in North America and a smaller expected decline in 2010. In 2010, North American sales are expected to fall 3 percent, while China will grow 10 percent. Asia and Africa will grow 6 percent each. Western Europe is expected to be in the doldrums in 2010, down 9 percent.
Laptops, netbooks and cell phones are growing fast in North America, while LCD TVs are growing fast in Asia. The drivers of growth are personalization, mobility and connectivity, said Steve Koenig, director of industry analysis at the CEA, speaking at a press preview event at the Consumer Electronics Show in Las Vegas. The biggest positive contributors to global consumer electronics revenue are laptops, LCD TVs, and Blu-ray movie players.
The CEA estimates that the U.S. recession ended in July. Over time, the North American and Western European markets will become a smaller and smaller piece of the global pie. Asia, South America and other regions will become bigger pieces.
“Our days of dominance are over in North America,” Koenig said.
Laptop units are expected to be 68 percent of overall PC sales, or 110 million units, in 2010. Average laptop prices are under $800, compared to $1,200 in 2005. Blu-ray is expected to hit 34 million units sold worldwide in 2010, up from 14 million in 2009. DVD players are expected to decline in sales from 92 million in 2008 to 80 million in 2009.
One of the brightest spots is wireless handsets, which fell 2 percent to 1.142 billion units sold in 2009. That is expected to grow to 1.169 billion, up 2 percent, in 2010.
In 2009, the big trends for the consumer electronics industry were growth in digital cameras, smart phones, netbooks, laptops, green products, Ethernet-connected TVs, high-definition camcorders, LED TV players, eBook readers and Blu-ray players. As for the top trends of 2010, CEA analysts said that they expect big growth in several areas.
For the coming year, they believe that the world will move beyond high-definition video on TVs to web-connected TVs. Mobile TV is expected to take off on tablet computers and mobile devices. One CEA analyst, Ben Arnold, believes that 3-D TV will see broad and strong growth across a lot of categories in 2010, from camcorders to Blu-ray players to laptops and TVs. There is skepticism about 3-D viewing in the home, but Arnold said that reminds him of the skepticism about the now-pervasive HD TV.
The trend toward web connected TVs will be stronger if manufacturers figure out how to make the experience simpler. Right now, 89 percent of Americans watch TV through a service such as cable TV or satellite. But only 8 percent watch TV on the Internet. And a full 65 percent have not yet linked a TV to the Internet.
The analysts said there is a gap in the market for devices with screens ranging from 5 inches to 15 inches. Smartphones occupy the lower end of the range, and laptops are in the 15-inch range. This 5 – 15-inch territory is a key battleground at this week’s show, with manufacturers launching all sorts of smart books, eBook readers, and netbooks to try to fill the gap. Netbooks are now breaking into the mass market; of those using them, 93 percent view web pages.
The fastest-growing products of 2010 are expected to be LED displays (up 256 percent), OLED displays (up 236 percent), Ethernet-enabled TVs (up 129 percent), eBook readers (up 127 percent), Ethernet-connected receivers (up 95 percent), and 3-D TVs (up 95 percent).