Standing room only meant a gaggle of press sat on the floor near the podium for the day's first press session.
Steve Koenig, head of the CEA’s industry research efforts, is next up here at the Consumer Electronics Show in Las Vegas, prepared to dazzle the assembled with statistics about everything.
The room is so crowded, people are sitting on the floor down front and along the sides of the room, prompting one individual to joke this is “Occupy CES.”
Koenig is joined on stage with Steve Bambridge, a researcher with the “boutique research” division of research firm GfK. GfK is the fifth-largest research firm in the world, Bambridge notes, focusing on tracking point-of-sale data at more than 370,000 outlets in 90 different countries, employing 3,000 people in that effort, tracking 4.5 million different products.
Koenig kicks off the discussion with a caveat: sales tax and exchange rates distort to some extent stats on sales around the world. All CEA data is inclusive of sales tax, he notes.
The Trends: in the “economic” bucket, it’s about emerging markets and about “broadening sales channels,” and about price deflation, says Koenig. The consumer trends are toward mobility, connectivity, convergence, personalization. The tech trends include embedded technology and enhanced “HMI,” among others.
The Big Number: global tech device spending will exceed $1 trillion this year, up from $993 billion in 2011.
Emerging economies really drove growth last year, with central and eastern Europe rising 18% and “emerging APAC” rising 17%. Growth in Latin America cooled from 34% in 2010 to just 11%. North America saw just 5%, and Western Europe saw 2% growth.
That growth in Western Europe was actually a mirage: it was mostly because of the change in exchange rate with the Euro. Growth was actually down in Western Europe in 2011 in real terms.
For this year, Koenig sees Central and Eastern Europe up 9%, emerging APAC up 18%, and Western Europe down 3%. There is “very significant downside risk” to Western Europe, says Bambridge. Total world growth will slip from 8% in 2011 to just 5%. North America is expected to have no growth at all this year.
The long-term trend is that developed economies are set to slip below 50% of global spending, while emerging markets surge to more than half. It’s all happening “quite fast,” Bambridge notes.
The “emerging APAC” region will surpass North America this year as the single largest region by percentage of spending, rising from 20% to 22% even as North America slips from 22% to 21%.
Smarphones are forecast to be the single largest category in global device spending this year, at 22% of the dollar total, with just 8% for mobile phones and 5% for tablet computers. Smartphones and tablets were the “growth stories” in 2011. Smartphone sales were up 59% in 2011, while tablet sales were up 222%. Both products will see their growth slow this year, with tablets growing just 59% and smartphones growing just 22%. “you are reaching a very high level of penetration for developed markets” for smarphones, says Bambridge.
Amidst all that, spending on traditional product categories is getting “squeezed.” That includes things such as car navigation systems, CRT television sets, printers, plasma TVs, DVD players, video game consoles, etc. They’re not going away, but they’re being bought less and less.
“The rush into smarphones has really squeezed many other portable device categories,” such as portable DVD players and MP3 players, notes Bambridge. But he notes, too, that within each traditional category, there are areas of strength, such as, for example, professional DSLR digital cameras.
Emerging markets are “leapfrogging” the traditional product categories, said Bambridge. For example, they may have no need to ever buy a digital camera because they’re buying smarphones. This is pushing spending into a few major categories, said Bambridge.
Digging into the product categories, global sales of mobile handsets will rise to 1.68 billion units this hear from 1.5 billion last year. That will be a deceleration from 15% to 12% this year.
The shift from “feature phones” to smartphones is well underway in developed countries but not as far along in emerging markets. But emerging markets are growing: the “emerging APAC” region, for example, probably saw 121% growth in 2011 in smartphones. That will probably be 69% growth this year, they anticipate.
One important factor is subsidies on phones. Apple (AAPL) really forced wireless operators to have to offer more subsidies, and subsidies for Android have also been growing, the two men said. Absent the subsidies, not nearly as many people would be excited about smartphones.
2012′s “sweetspot” in mobility will be cheap smartphones for emerging markets. About a quarter of global growth will be coming from the sub-$200 smartphone category. That’s where “the next battle will be,” said Bambridbe, citing examples of low-end phones such as Nokia’s (NOK) 5230 handset, and Research in Motion’s (RIMM) BlackBerry Curve 8520.
Bambridge said sales of tablets could exceed 100 million units this year. The official estimate is 96 million units, up from a prior 88 million-unit estimate.
Ultrabooks will be “a story to watch,” said Koenig, helped by the emerging market desire for greater mobility, as a consequence of the lack of developed-market infrastructure.
An issue to watch this year is whether tablets will eat into notebook computer growth. So far, that’s not the case. Laptops are still expected to grow double digits this year.
Lastly, television set growth is slowing to 1% this year from 2% last year, at roughly 262 million units. Several things are happening in TVs. One is a shift to LCD television sets that is happening very rapidly and that is pushing out older technologies. Another is a shift to LED TVs and then OLED TVs. LED TVs cost only about 20% more now, which is not much of a barrier, remarked Bambridge.
TV sales revenue is expected to decline by 13% in the developed world but to rise by 11% in emerging markets is year
Fun factoid: “penetration” of 3-D TV sets is highest in China, out of all regions. one in ten displays last year was a 3-D set. CEA thinks 3-D’s share will grow, said Koenig.
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