United States Consumer Electronics Report Q2 2012

The US consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and AV products, is projected to be worth around US$247.2bn in 2012. This is expected to increase to US$286.7bn by 2016 at a CAGR of 3.8%, driven by premium TV sets, smartphones and notebooks. In 2011, sales of consumer electronics products such as Android smartphones and LED-backlit TV sets grew strongly as the recovery gathered traction. However, falling average prices in many product categories placed revenue and margins under pressure, with the average price of a LCD TV set in the US market now below US$600, while the average price of smartphones continues to fall as new manufacturers enter the market with lower priced products.

Mature markets in many segments mean vendors will continue to rely on product innovation such as internet-enabled TV sets to drive growth in 2012. Surveys suggest that sales of 3D TV sets and 4G smartphones could also benefit from recovering consumer confidence, but, if gas prices remain high or interest rates pick up dramatically, it would be bad news for disposable household income.

Computers

BMI forecasts US PC hardware sales of US$146.6bn in 2012. CAGR for the 2012-2016 period will be about 2.7%, a little higher than previous expectations as multimedia and entertainment notebooks remain buoyant. US PC sales endured a year of overall stagnation in 2011, with an annualised contraction in Q411, although there were growth areas such as tablets Notebooks remain the largest product category but face competition from the smartphones of RIM, Apple, HTC and other vendors as well as tablet notebooks, spearheaded by Apple’s iPad.

AV

The US domestic video, audio and gaming device market is projected at US$68bn in 2012. Video applications will account for around 80% of demand during the 2012-2016 forecast period, with growth areas linked to new technologies such as LED TV sets, 3D TV and Blu-ray. Around twothirds of US households now have flatscreen TV sets, which will require manufacturers to introduce new features to encourage continued upgrades. Vendors will focus on product innovation, with drivers including improved display quality and wider screens, as well as features such as internet connectivity.

Mobile Handsets

Total US market handset sales are expected to grow to around 172mn units in 2016. With an increasingly saturated US market, handset revenue will be driven by emerging product areas such as smartphones, touchscreen phones and HD camera phones. Smartphones accounted for more than 50% of volume sales in the US market for the first time in 2011, with Android models the comprising close to half of sales, and with Apple’s iPhone in second place As new longterm evolution (LTE) networks began to come online, this should boost replacement handset purchases.