Consumer Electronics Industry Revenues to Reach All-Time High in 2014
Published on: 16th Jul 2014
Driven in part by the skyrocketing sales of connected devices, revenues for the consumer electronics (CE) industry are projected to grow two percent in 2014, reaching a record high of $211.3 billion, according to the USA based Consumer Electronics Association (CEA).
The new report projects that total industry revenue will reach a record $211.3 billion in 2014; a steady, two percent increase from $207 billion in sales in 2013. This midyear update is in line with CEA's projection in January, slightly adjusted after better-than-expected 2013 revenue growth. Looking ahead to 2015, CEA expects industry sales to grow by 1.2 percent, with industry revenues reaching another all-time high of $214 billion.
Emerging Category Growth
CEA's forecast projects that revenues from emerging product categories will grow by 242 percent year-over-year in 2014, and another 108 percent in 2015. These developing technology categories include 3D printers, health and fitness devices, smart watches, Ultra HD television displays and smart thermostats, a newly-introduced sales category to the report.
Cumulatively, while the emerging product categories represent less than three percent of the entire CE industry revenue, they are expected to contribute almost $5 billion to the overall CE industry in 2014. That total is an astounding jump from just two years ago, when revenue from these categories was too small to track.
Mobile Connected Devices
Sales of mobile connected devices, specifically smartphones and tablets, will continue to stand as the top two revenue drivers of the CE bottom line in 2014. These two devices alone will represent 35.1 percent of total CE industry revenue in 2014. Although revenue growth for this category has slowed, unit sales will continue to see increases.
Smartphones: As the sales leader of the industry, smartphone unit shipments are projected to reach 163.5 million this year, up eight percent from the 151 million units sold in 2013. Additionally, smartphone revenues are expected to generate $46 billion in 2014, a seven percent increase from $43 billion in 2013.
Tablets: Unit sales of tablets are projected to reach 80.4 million this year, a four percent increase from 77.4 million in 2013. Revenues for tablets will reach $25.6 billion this year, down three percent.
"These top revenue-driving products, namely LCD flat panel TVs and mobile connected devices, can now be found in millions of households in a remarkably short amount of time," said Steve Koenig, CEA's director of industry analysis. "This has resulted in a crowded market, naturally lending itself to slowed revenue growth. Yet we're at an interesting turning point in technology, as these same products are increasingly adopting premium, differentiating features, driving consumer interest and creating opportunities across other categories in the industry."
Other Positive Growth Categories
Among the other product categories expected to see positive growth in 2014:
- Audio: Headphones, Bluetooth wireless speakers and soundbars remain the standout products of the category. Headphones are expected to sell 75.9 million units, earning $1.4 billion in revenue (a 20 percent increase over 2013). Bluetooth wireless speakers are expected to generate $650 million in total revenue in 2014, a 69 percent increase year-over-year, while soundbars are projected to reach $611 million in revenue (a 17 percent increase).
- Automotive electronics: The growth of new vehicle sales in 2014 will propel factory-installed systems to reach $11 billion in revenue, an increase of 20 percent.
- Gaming consoles: The release of eighth-generation gaming consoles at the end of 2013 is projected to drive revenues of $4.8 billion in 2014, along with a 35 percent increase in unit shipments.
Although CE industry revenue growth has slowed in recent years, from 7.7 percent in 2011 to 1.7 percent in 2013, total revenue crossed $200 billion for the first time in 2012 and shows no signs of retreating below that milestone.
"Industry revenue is reaching all-time highs, fueled in large part by a few specific categories, while much of the industry is still experiencing relatively flat growth due in large part to the continued decline of average selling prices," said Shawn DuBravac, chief economist and senior director of research, CEA. "Although some categories continue to struggle, clearly there are many bright spots within the CE industry, and consumer enthusiasm for new features and emerging product categories provide reasons for long-term optimism about continued overall growth."