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Comprehensive CE Update Reveals Winners, Losers and Future Opportunities
Global CE Market Analysis and Commentary
11 Oct 2017 - Futuresource Consulting has published its comprehensive annual report on the state of the worldwide consumer electronics landscape, revealing worldwide CE sales grew 0.3% in 2016 to reach $673 billion at trade level, on track to achieve 1.7% CAGR to 2021.
The report, which covers TV/AV sales, mobile devices, consumer PCs, wearables, cameras, game consoles and automotive infotainment, reveals an overall slowdown in the CE market, with many brands concerned about future growth due to increasing hardware commoditisation.
"It's a harsh landscape, but there are patches of sunshine," says Jack Wetherill, Principal Analyst at Futuresource Consulting. "We're seeing growth in some TV/AV products, with Digital Media Adaptors/Media Streamers, home audio and headphones attracting much-needed consumer attention.
"After a promising start, the wearables sector took a revenue hit in 2016, with the Apple Watch waning and lower-priced health and fitness devices taking control. However, there's plenty of life left in the category and next year we'll see a turnaround. Look out for devices that differentiate themselves from mobile, particularly in the smartwatch category, and marketing messages that accentuate the differences and tap into the mainstream. Our forecasts show strong wearables growth out to 2021 and beyond, with a CAGR of 14%."
Mobile is still CE's all-star player, and now delivers 50% of total global consumer electronics revenues, with smartphones surpassing 1.6 billion units and trade value growing 4% in 2016. By 2021, mobile will be worth more than $360 billion.
The TV displays market was hit hard last year, with market value falling by more than $1 billion. However, consumer appetite for more expensive sets and a shift to 4K UHD will bring a reversal of fortune. Futuresource's forecasts point to a total AV category market value in excess of $150 billion by 2021, with TV displays accounting for most of the value growth.
Smart home continues to develop, with fragmentation and lack of interoperability across rival ecosystems becoming less of a concern. Integration between devices and connectivity protocols are establishing themselves and paving the way for whole-home ecosystems. Although the category will only contribute a small slice to overall CE revenues, it is an attractive new battleground which presents an additional revenue stream for brands, OEMs and service providers alike.
Looking at the bigger picture, on a worldwide scale CE market growth is beginning to reach an equilibrium. Previous deterioration in developed markets has been reversed, but the recent growth in emerging markets is on a slowdown, despite a few pockets of sector growth.
"Last month China received its second credit rating downgrade of the year," says Simon Bryant, Associate Director of Consumer Electronics at Futuresource. "This reveals the extent of current economic difficulties, amid fears that rising debts are adding to economic and financial risks. There's no doubt that this turbulence will continue to influence the global game.
"Now, more than ever before, the outlook for companies operating in this arena will be determined by the strength of their business planning. The strategic decisions they make, both on a category level and by bringing geographical opportunities into hard focus are central to survival and will define their future success or failure.
"Samsung has now stabilised after reporting a downturn in 2015. Conversely, in 2016 Apple reported its first decline in revenues for over a decade and the rest of the major brands continue to report flat."
Over the next five years, Futuresource expects an array of new categories to emerge in the CE landscape, including robots for care, domestic assistance and infotainment purposes, as well as innovations within the smart products category.
"Watch out for a new wave of hybridised smart products, hinted at by the capabilities of Sony's Xperia Touch, which has the potential to be a multi-purpose home hub, acting as the primary interface for many applications," says Bryant. "The future CE landscape does look challenging, but for the right company with the right approach, the opportunities could be boundless."
Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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