Tablets, Smartphones Driving CE Sales

by Aaron Baar, Jul 24, 2012, 6:14 PM

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If further evidence is needed that smartphones and tablets are taking off among the American public, the Consumer Electronics Association has it. 

According to the trade group’s semi-annual industry forecast, smartphones, tablets and other mobile connected devices will push overall CE sales above $206 billion in the U.S. in 2012, a growth of 5.6% and nearly two percentage points higher than a previous forecast released in January. 

“[Smartphones and tablets] continue to get stronger, while many of the other categories are getting weaker,” Steve Koenig, director of industry analysis at the CEA, tells Marketing Daily. “What we’re starting to see now is the impact of these mobile connected devices as [a factor] that is impacting other categories.”

Indeed, tablets are going to be the must-have consumer device throughout the year. Device shipment revenues are expected to reach $29.1 billion this year, $10.8 billion more than the $18.3 billion forecast in January and an 83% growth over the previous year. 

“Tablets are going to be the hottest must-have device for the holiday season, and by January 2013 you’ll see about one of every two households will have a tablet,” Koenig says, noting that both Google and Microsoft have announced they will be following Apple’s lead and create their own branded tablets specific to their operating systems.

At the same time, smartphones will continue to have similar penetration, with a presence in 56% of U.S. households by the end of the year. The category will be the primary revenue driver for the industry, with shipment revenues reaching $33.7 billion in 2012, Koenig says. “With U.S. household penetration of smartphones surpassing the 50% threshold, we’re seeing slowing sales of dedicated devices, as consumers seek singular devices that can perform multiple functions,” he says. “We expect this trend to continue into 2013.”

Moving into 2013, the trade group expects industry revenues to increase 4.5%, reaching $215.8 billion. While smartphone and tablet sales will continue to be strong, Koenig says products such as ultrabooks and those that provide in-vehicle connectivity will come on strong next year. “Tablets will be in the bull’s eye in the holiday gifting, but computing in general will be part of that target,” he says. “Ultrabooks, and the next generation of video game consoles will be a growth category, as will automotive electronics.”

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