El Segundo, Calif. — Global factory revenue for smartphones and tablets is forecast to exceed revenue for the entire consumer electronics (CE) market this year, marking the first time this has ever occurred, according to the Application Market Forecast Tool (AMFT) from IHS Inc. The forecast projects that global OEM factory revenue for media and PC tablets as well as 3G/4G cellphones—dominated by smartphones—will tally $354.3 billion in 2013.
In comparison, the OEM factory revenue for the CE market, including televisions, audio equipment, cameras and camcorders, video game consoles and home appliances, is projected to reach $344.4 billion, which is three percent lower than the tablet/smartphone forecast. The CE market historically has been much larger than the tablet and smartphone segment, with CE 30 percent larger last year, said IHS.
"Consumer demand for smartphones and tablets has been flourishing in the past few years while sales growth for CE products has languished in the doldrums," said Randy Lawson, senior principal analyst for semiconductors at IHS, in a statement. "The fact that these two product categories are on their own able to generate more OEM factory revenue than the entire CE market illustrates the overwhelming popularity of smartphones and tablets. Meanwhile, the CE market has gone flat, with many of the major product types experiencing either low growth or declines in revenue during the past six years."
"Consumers simply are finding more value in the versatility and usefulness of smartphones and tablets, which now serve as the go-to devices for everything from phone calls, to photography, to navigation, to media playback, to fitness tracking," added Lawson. "Because of this, smart mobile platforms are displacing sales of CE products such as digital still cameras, camcorders, GPS and media players."
OEM factory revenue for smartphone and tablet markets has been expanding by a factor of nearly nine to $354.3 billion in 2013, up from $41.2 billion in 2007, according to Lawson. Revenue is expected to increase by 31 percent, he said. This growth rate is expected to slow in 2014, increasing by only 18 percent to reach $418.6 billion.
In comparison, consumer electronics OEM factory revenue has been flat during the past few years, growing by slightly less than 1 percent from 2007 to 2013, said Lawson. Of the 20 CE product segments tracked by IHS, 14 are expected to tally a decrease in compound annual growth rates (CAGR) from 2007 through 2013. IHS projects that the start of the LCD TV revenue decline in 2014 sets the stage for a long-term contraction in the CE market. By the end of 2017, CE OEM factory revenue will fall to $327 billion, down 5 percent in 2013, said IHS.