Consumer Electronics Market to Contract in 2014 As Market Awaits Innovative Products

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The 2014 International CES event this week in Las Vegas will serve as a showcase for exciting new products like ultra high definition (UHD) televisions and wearable technology devices. However these products won't ship in high enough volume in 2014 to rescue the traditional consumer electronics (CE) device from a decline in revenue this year according to IHS.

Worldwide CE manufacturing revenue will fall to $250.0 billion in 2014, down 2 percent from $255.7 billion in 2013, based on data from the IHS Internet-Enabled Consumer Electronics Market Tracker. This will mark the fourth consecutive year of decline for the CE market.

The traditional CE market consists of a range of devices, including televisions, set-top boxes, digital still cameras, video game consoles and Blu-ray players. The market is under increasing pressure from wireless devices which consumers increasingly are purchasing and using in place of traditional CE devices.

In a dramatic illustration of this trend, global factory revenue for smartphones and tablets in 2013 rose to be larger than for the entire CE market -- the first time this has ever occurred.

"While exciting new technologies such as UHD and wearable devices are being shown at CES, it will take a few years until these products attain enough of a volume to drive the growth of the overall CE market," said Jordan Selburn, senior principal analyst, consumer devices, for IHS. "Until these products enter the mainstream, traditional CE revenue will continue to dwindle."

IHS now predicts 38.5 million UHD LCD TV sets will ship in 2018, up from 1.5 million in 2013, according to the TV Systems Intelligence Service at IHS. Shipments will fly up more than 500 percent to reach 10 million in 2014. However, UHD sets still have a long way to go before they command a major share of the overall market. In 2018, UHD will account for only about 16 percent of all LCD TV shipments.

Global market shipments of wearable devices for infotainment applications will grow to 130.7 million units in 2018, up from 51.2 million in 2013. The infotainment segment consists of products including Bluetooth headsets, head-up displays, imaging products, smart glasses and smart watches.

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