The Next Big Thing in Consumer Electronics
Mobile devices,connectivity, quality AV enhancers point the wayMarch 20, 2013 By Sean Murphy, CEA Senior Account Manager
Each summer and winter, CEA takes stock of the consumer electronics industry via its forecasts. We typically offer the same disclaimer: there are no magic powers at our disposal, but our unique methodology provides us with an effective way to make confident predictions about the future.
In fairness, no one has needed a crystal ball in recent years to ascertain what has been happening in consumer electronics. The one-two punch of smartphones and tablets has been the industry story.
While overall CE sales continue to grow, with total 2012 revenues in excess of $200 billion (a 4.7 percent increase year-over-year),this momentum is largely being driven by the categories producing mobile and connected products. More than 80 million tablets shipped last year, generating $30.8 billion, a 93 percent increase over 2011. Smartphones also showed no signs of stagnation, moving over 111 million units and generating $33 billion, a 21 percent year-over-year increase.
Even as we celebrate the success of these devices, we must acknowledge that as certain sectors flourish, it’s often at the expense of mature product categories. For example, we see the ongoing effects mobile devices (especially smartphones) have had on the camcorder and digital camera markets. As we grow accustomed to high-functioning products that perform multiple tasks, we reach an inflection point where new adoption in one arearesults in attrition elsewhere.
At the same time, innovation always has been the lifeblood of the CE industry. Even within categories that have attained substantial household penetration, new applications and functionality help keep familiar products fresh. Whether it’s Blu-ray players perfecting streaming capabilities or audio receivers integrating MP3 accessibility, shrewd manufacturers havestudied present trends to ensure they have a future. Even digital displays, the products that dominated the last decade, continue to advance, with larger screen sizes, smart applications and the integration of LED technology.
At the 2013 International CES, it was impossible to ignore the plethora of smartphone cases. Established brands, as well as smaller start-ups, were flaunting a variety of colorful, eye-catching options. This is another reflection of companies finding—or creating—opportunity in what is considered a crowded marketplace. It also bodes well for the accessories category, which recent forecasts have revealed to be a sector ripe with potential. The PC accessory market in particular, buoyed by the proliferation of tablets, is likely to remain a big story here.
What will the big product be at next year’s CES? What is the next big thing in CE? These two questions, which CEA analysts are asked most frequently, end up being inextricably connected. Without a doubt, the last two years have illustrated that many of these answers are readily available. Ascertain categories collapse and others conquer, the market opportunity rests with those that are able to make great things even better.