Although the consumer electronics industry fared well during the economic downturn, it’s not completely impervious to macroeconomic forces.
Thanks to slower-than-expected GDP growth and cuts that have come from sequestration, the Consumer Electronics Association is estimating that overall U.S. spending on electronic devices will hold relatively steady at $202.6 billion for 2013 (a 0.2% growth over 2012). The forecast is down from the 3% growth and $209.6 billion in revenues the CEA forecast at the beginning of the year.
“In January 2013, we forecast the economy would expand. We are now expecting to the economy to grow only 1.3% and have tempered our [own] growth expectations,” Chris Ely, director, industry analysis at the CEA, tells Marketing Daily. “The fiscal drag, including the effects of sequestration, is likely to [continue to] affect 2013. That has also affected consumer electronics.”
Despite the flat forecast, several areas within the industry will remain strong. Smartphone sales will continue to increase, with revenues expected to surpass $37.8 billion, up 14% from the previous year. Similarly, tablets will see double-digit growth, with revenues of more than $27 billion. Overall, sales of mobile electronics (including smartphones and tablets) will account for about a third of CE industry revenue in 2013.
Other areas showing strength include home audio, where shipments are expected to increase 11%, as consumers purchase bluetooth speakers and soundbars for their in-home electronics, and in-car audio (factory-installed electronic systems will reach $9.2 billion in 2013, according to the CEA, and demand is also increasing for aftermarket sales, Ely says).
Despite the flat outlook for 2013, the CEA remains robust on the future, predicting revenues of $211.7 billion in 2014 (up 4.5%), thanks to the continued adoption of mobile technology, introduction of next-generation game consoles, and the continued adoption of in-car technology, Ely says.