El Segundo, Calif. — The global market for connected, or Internet-enabled devices is expected to surpass 6 billion units in 2014, as new products including cell phones, tablets and computers enter the market, according to a new report from IHS Technology (NYSE: IHS). The global projection calls for 6.18 billion units to be produced in 2014, up six percent from 5.82 billion in 2013.
The report, “WLAN 802.11ac: Commercial Product Introductions Start to Ramp Up,” finds this will be the largest increase for the market in four years, surpassed only by the 10 percent increase in 2010, a year after the global economic recession ended.
“The improved growth this year of the connected devices industry marks the return of higher production as manufacturers deliver all sorts of connectivity equipment to users,” said Jagdish Rebello, Ph.D., senior director for information technology at IHS, in a statement. “Given the voracious appetite of consumers for social media and their yen for always-on connectivity, it’s little surprise that makers will continue to turn out such devices to keep buyers engaged.”
The report also indicates that production growth rates will slow in the next few years, although total units produced will continue to increase. IHS analysts project that about 19.42 billion new devices will enter the market between 2015 and 2017.
The biggest production segments include video game consoles, media tablets, mobile handsets, liquid-crystal display televisions (LCD TVs), set-top boxes and mobile PCs. Game consoles is leading the pack, up 45 percent this year due to major product refreshes last year, said IHS. This is followed by media tablets and cell phones, with production up 25 percent and 7 percent, respectively.
The PC segment, including tablet PCs, are also expected to do well despite only a two percent increase for all PCs. New generation processors from Intel and AMD are expected to enable a new class of entry-level pricing for PC tablets, according to the report. Other segments projected for greater growth include LCD TVs, up five percent, and set-top boxes, up seven percent. "LCD TV growth will be driven by the emerging markets, while cable digitization will spur set-top box shipments," said Rebello.
On the flip side, there are several equipment markets that are set for reduced production in 2014, including digital still cameras, camcorders, desktop PCs, DVD players/records and portable media players. The biggest losers this year include the camcorder market where global production is expected to fall by 21 percent, and the MP3 player segment with a projected decline of 27 percent.
Even production for digital still cameras is expected to drop 13 percent in 2014 compared to 2013, according to the report. These devices have dropped out of favor as consumers have switched to camera phones. Even though higher end digital single-lens reflex cameras continue to grow, their strength is not enough to offset the larger loss incurred by the point-and-shoot segment, said IHS.