Global Consumer Electronics:Trends, Developments and Insights                         June 2009
Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
Scope                                                                                    Consumer Electronics-Trends     ©...
Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
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Global Performance                                                               Consumer Electronics-Trends   © Euromonit...
Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
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Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
Regional Market Insights                                           Consumer Electronics-Trends    © Euromonitor Internatio...
Regional Market Insights                                         Consumer Electronics-Trends   © Euromonitor International...
Regional Market Insights                                               Consumer Electronics-Trends     © Euromonitor Inter...
Regional Market Insights                                           Consumer Electronics-Trends   © Euromonitor Internation...
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Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
Global Consumer ElectronicsTrends                                 Consumer Electronics-Trends   © Euromonitor Internationa...
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Global Consumer ElectronicsTrends                               Consumer Electronics-Trends   © Euromonitor International ...
Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
Channel Analyses                                                     Consumer Electronics-Trends     © Euromonitor Interna...
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Channel Analyses                                              Consumer Electronics-Trends       © Euromonitor Internationa...
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Channel Analyses                                           Consumer Electronics-Trends        © Euromonitor International ...
Consumer Electronics-Trends   © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsG...
Category Analysis                                            Consumer Electronics-Trends   © Euromonitor International >In...
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Global pc electronics

  1. 1. Global Consumer Electronics:Trends, Developments and Insights June 2009
  2. 2. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 2
  3. 3. Scope Consumer Electronics-Trends © Euromonitor International >Scope This presentation on the world market for consumer electronics covers the following products: 2008 Global Consumer Electronics 2.7 billion units In-home Portable In-car Computers* 1.2 billion units 1.4 billion units 144 million units 192 million units Televisions and Cameras In-car media players Desktops Projectors Camcorders VCRs and DVD In-car speakers Laptops Players Portable Media players TV and VCR/DVD Navigation systems Mobile phones Combinations Other in-car Home Audio and Portable computers electronics Cinema Personal Computers *duplicate (desktops and laptops under computers are also included within personal computers and portable computers, respectively) Disclaimer Much of the information in this presentation is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors Figures in tables and analyses are calculated from unrounded data and may not sum 3
  4. 4. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 4
  5. 5. Global Performance Consumer Electronics-Trends © Euromonitor International >Volume Performance Volume sales for in-home consumer electronics were CE Market in Volume (2003-2008) highest in the Asia-Pacific region. At the end of the 3.0 50 review period, the region accounted for more than 45 44% of overall global volume sales. 2.5 Year-on-Year growth 40 Global volume sales of in-car consumer electronics 35 reached more than 144 million units in 2008, billion units 2.0 30 reflecting robust demand in China (28% of total 1.5 25 sales), USA (17.4%), Japan (8.4%) and Germany 20 (6%). 1.0 15 Global volume sales for computers grew to nearly 0.5 10 193 million units in 2008, with heaviest sales (32%) 5 coming from the Asia-Pacific region. 0.0 0 2008 Volume Share by Sector 2003 2004 2005 2006 2007 2008 In-home consumer Total Volume Volume Growth 6.6% 41.6% electronics 4.9% Portable consumer Volume sales of consumer electronics products grew at electronics a CAGR of 11.3% between 2003 and 2008, reaching 2.7 billion units in 2008. Over the same period, value In-car consumer sales increased at a CAGR of nearly 14%, reaching electronics more than US$739 billion in 2008. (aftermarket) Overall CE volume sales were boosted by strong sales Computers of portable consumer electronics and the increasing 46.8% popularity of miniaturization. 5
  6. 6. Global Performance Consumer Electronics-Trends © Euromonitor International >Value Performance Regions with strong contributions to value sales CE Market in Value(2003-2008) performance included Eastern Europe, Latin America, Asia Pacific and Australasia. Growth sectors like mobile 800 25 phones, multimedia players and in-car consumer 700 Year-on-Year growth electronics bolstered market performances in those 20 600 $ USD billion areas. 500 15 In-home consumer electronics was the best performer 400 with nearly 48% of global value sales in 2008. This 10 300 performance, however, represented a sales decrease from prior year due mainly to declining unit prices of 200 5 major in-home consumer electronic products. 100 Countries with strong value sales growth during the 0 0 review period included Argentina (47% CAGR) for in- 2003 2004 2005 2006 2007 2008 home products, Poland (28% CAGR) for portable products and South Africa (64% CAGR) for in-car Total Value Value Growth products. Consumer Electronics CAGR Value While the global financial crisis did not affect overall value Performance performance in the sector in 2008, future performance is 20 uncertain as, inevitably, product distributors will be forced to reduce unit prices in order to continue attracting 17.5 17.7 customers. CAGR % 15 10 13.3 Consumer demand for sophisticated, compact and well- 10.3 designed products always drove sales in the global CE 5 market. Due to market setbacks, however, many households are showing a degree of cautiousness and 0 many consumers are beginning to seek out the best In-home Portable In-car Computers value for their money. 6
  7. 7. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 7
  8. 8. Regional Trends Consumer Electronics-Trends © Euromonitor International >Western Europe Volume sales in Western Europe grew at a CAGR of 7.2% over Western Europe Volume Share the review period, reaching 530 million units in 2008. (2008) United Kingdom made the biggest contribution to the region‟s Others Austria 2% Belgium volume sales in 2008 with nearly 20% of the total. This was 10% 2% followed closely by Germany with 18.3%. Portable consumer electronics turned out to be the most United significant sector in the regional CE market. In 2008, volume Kingdom France 20% 14% sales reached more than 280 million units, accounting for nearly 53% of overall volume sales in Western Europe. There is increased demand 2008 Highest Performing among Western European Electronic Products in consumers for portable Germany Western Europe (volume) consumer electronics products 18% such as portable computers, % Share Turkey media players and mobile 4% Mobile phones 29.3 phones. Mobile phones emerged as the best- Sweden 2% Greece Personal computers 15.6 performing product in terms of 2% volume sales with more than Spain Televisions and 155 million units sold in 2008. 10% Nether- Italy Portugal 12.7 lands 10% projectors 2% Value sales in the Western 4% European consumer Computer peripherals 12.4 France recorded the highest value sales with electronics market reached US$37.4 billion, representing growth of more more than US$200 billion in than 25% over prior year. The impressive Portable media 2008, reflecting a CAGR of 9.5 performance was due in large part to sales of players nearly 13% over the review high-priced televisions and projectors. period. 8
  9. 9. Regional Trends Consumer Electronics-Trends © Euromonitor International >Eastern Europe 2008 Eastern European Countries Volume sales of consumer electronics in Eastern Europe (volume share) reached nearly 170 million units in 2008, representing a CAGR of 16.2% during the review period. Romania 8% Russia contributed the most to volume sales with nearly 82 million units sold in 2008. Russia was followed by Poland, Romania and Hungary. Poland Russia 48% More than 55% of overall volume sales of consumer electronics 19% products in Eastern Europe came from the portable consumer electronics sector in 2008. Value sales in Eastern Europe reached more than US$46 billion Hungary in 2008. Between 2003 and 2008, value sales grew at a CAGR 6% of nearly 25%. Others 19% 2008 Top 10 Electronic Products in E Europe Mobile phones was the most significant consumer % volume share electronics subsector in Eastern Europe in 2008. Mobile 1 Mobile Phones 26.2 phones represented 70% of overall volume sales of 2 Laptops 13.5 portable electronics and nearly 50% of total portable value sales. 3 Desktops 12.3 Value sales for laptops reached more than US$6.2 billion 4 Digital TVs 9.9 in Eastern Europe in 2008, followed closely by value sales 5 HDTV (High Definition TV) 7.6 for desktops which came in at nearly US$5.7billion. 6 Computer peripherals 7.1 One factor influencing purchasing behaviour in Eastern 7 Digital cameras 5.7 Europe is that CE products are regularly on sale not only 8 Monitors 4.9 in specialist shops but also in consumer electronics 9 Digital camcorders 3.0 supermarkets. Overall declining unit prices also play an important role in driving volume sales. . 10 Portable media players 3.0 9
  10. 10. Regional Trends Consumer Electronics-Trends © Euromonitor International >North America Volume sales of CE products in North America reached 2008 North America Volume Shares more than 515 million units in 2008, representing a CAGR of just over 7% during the review period. Of that 600 1.8 2008 total, nearly 474 million units (92%) were sold in 1.6 Year-on-Year growth 500 In million units the United States. 1.4 400 1.2 Value sales grew at a CAGR of 8.2% between 2003 1.0 and 2008, reaching US$147.3 billion in 2008. In the 300 0.8 US, value sales reached US$135 billion in 2008, a 200 0.6 slight decline over prior year. 0.4 Sales of digital electronics continued to dominate the 100 0.2 North American flat-panel market in 2008. Lower prices 0 0.0 and the wider range of screen sizes were among the 2003 2004 2005 2006 2007 2008 key factors spurring consumer demand for HDTVs. Canada Volume USA Volume 2008 Top 10 Electronic Products in North America Canada growth rate USA growth rate % volume share Increased demand among busy consumers for portability drove 1 HDTV (High Definition TV) 20.6 sales of mobile phones and laptops, positioning them as the 2 Mobile phones 18.5 second and third hottest products (in terms of value sales) in 3 Laptops 15.6 the North American consumer electronics market. 4 Computer peripherals 9.2 Depending on the severity of the recession and the possibility 5 Desktops 6.2 of unexpected oil price spikes, the consumer electronics sector 6 Digital cameras 5.3 in the region could face a bumpy road in the short term. At the 7 Monitors 5.0 same time, the long-term economic outlook for the region is 8 Portable multimedia players 3.6 risky due to high trade and budget deficits, historically low 9 Printers 3.1 household savings rates and mounting consumer debt, all of 10 Navigation systems 2.8 which are expected to begin to affect performance in the sector. 10
  11. 11. Regional Trends Consumer Electronics-Trends © Euromonitor International >Latin America Volume sales for consumer electronics in Latin America reached 2008 Latin America Volume Share almost 202 million units in 2008, representing a CAGR of 14.8% CAGR during the review period. Brazil emerged as the dominant Others market, accounting for almost 47% of total Latin American 18% Argentina 13% volume sales. Value sales reached US$64.5 billion in 2008. Portable consumer electronics was the most dynamic CE sector, recording volume sales growth of 18% in 2008. Mobile Mexico phones dominated this sector, accounting for more than 78% 17% volume sales. Personal computers was the leader in the in-home CE sector in 2008, accounting for 55% of total volume sales. Televisions and projectors ranked second, accounting for nearly 21% of volume sales.. Chile 5% Almost 79% of the portable consumer electronics sold in Latin America were mobile phones, an indication of the popularity of communicating on-the-go. Brazil 47% 2008 Latin America Consumer Electronics Volume Sales In-car media players was the leading subsector in the 120 Latin American in-car consumer electronics Million units 100 95.1 100.3 subsector in 2008 with just over 59% of total volume 80 sales. In contrast to the dwindling popularity of in-car 60 CD players in markets like North America, in Latin 40 16.7 America these products continued to show 20 6.4 remarkable growth with volume sales increasing at a 0 CAGR of 18.4% during the review period. Demand In-home Portable In-car Computers for in-car CD players was particularly high in Brazil. (aftermarket) 11
  12. 12. Regional Trends Consumer Electronics-Trends © Euromonitor International >Asia Pacific 2008 Asia Pacific Volume Share Volume sales of consumer electronics in Asia-Pacific Japan reached more than 1.13 billion units in 2008, India 17% 13% representing a CAGR of more than 14% during the Malaysia review period. China emerged as the biggest market in 1% volume terms with 49% of the region‟s total volume South sales in 2008. Korea 5% Value sales of consumer electronics products grew at a CAGR of nearly 15% during the review period, reaching Taiwan more than US$232 billion in 2008. 2% In-home consumer electronics was the largest sector accounting for 47% of total volume sales in 2008. Rest of However, it‟s expected that portable consumer Asia Pacific electronics will replace in-home CE in the top position by 13% the end of 2009. China 49% Asia Pacific CE Value Sales 250 High Definition TVs (HDTVs) were one of the most 200 dynamic products in the in-home CE market in the Asia- US$ million 150 Pacific region. Volume sales of HDTVs grew at a CAGR of more than 185% during the review period. 100 Portable media players showed robust sales 50 performance thanks to the popularity of mobile phones, 0 which raked in value sales of more than US$67 billion in 2008. 2003 2004 2005 2006 2007 2008 China Japan South Korea India Strong sales of laptops and digital cameras reflected Taiwan Malaysia Singapore the growing popularity of portability in the region. 12
  13. 13. Regional Trends Consumer Electronics-Trends © Euromonitor International >Australasia 2008 Australasia Market Performance Portable CE products were the most popular among consumers in Australasia. Mobile phones, laptops and 50 50 digital cameras continued to show consistent growth. million units US$ million 40 40 Consumers are demanding devices that enable them to 30 30 access whatever content they want, when they want it. 20 20 Portable computers, portable media players and devices 10 10 like personal video recorders (PVR) and Internet Protocol TV (IPTV) are experiencing strong growth and 0 0 generating a great deal of consumer interest in 2003 2004 2005 2006 2007 2008 Australasia. Volume Value Consumers showed high interest in converged Volume sales for consumer electronics in Australasia electronics products as they address a number of reached more than 44 million units in 2008, household and professional needs. representing a CAGR of 10% between the 2003 and 2008. Portable consumer electronics emerged with the 2008 Top 10 Electronic Products in Australasia highest volume sales in the sector with 47% of the total % value share in 2008. Value sales reached over US$14 billion in 1 Mobile phones 25.2 2008. 2 Desktops 16.2 In terms of value sales, HDTV was the best performer in 3 Laptops 13.4 the in-home consumer electronics sector with sales of 4 Computer peripherals 10.9 nearly US$597 million in 2008. The demand for high 5 Digital cameras 6.8 definition television coincides with the need for consumers to replace their analogue TVs in preparation 6 Printers 4.8 for the shift to digital broadcasting in the region. 7 Monitors 4.3 8 HDTV (High Definition Television) 4.2 Sales of desktops continued to increase, reaching volume sales of more than 2.2 million units and nearly 9 Portable media players 3.4 US$2.3 billion in 2008. 10 Projectors 2.9 13
  14. 14. Regional Trends Consumer Electronics-Trends © Euromonitor International >Middle East and Africa During the review period, value sales of consumer Top Performing Electronic Products in Middle East electronics products in Middle East and Africa market and Africa 2003-2008 (volume) grew at a CAGR of 13.6%, reaching more than US$34.8 2003-2008 billion in 2008. Sales of portable consumer electronics CAGR were the primary driver of growth, accounting for more 1 Projectors 32.5 than 50% of value sales in 2008. 2 Mobile phones 26.4 Over the same period, volume sales grew at a CAGR of 3 Digital TVs 25.2 15.5%, reaching nearly 130 million units in 2008. 4 Printers 24.9 Volume sales of portable consumer electronics products 5 Portable multimedia players 21.3 reached nearly 68 million units in 2008. 6 HDTV (High Definition Television) 21.2 7 Laptops 21.1 In the in-home consumer electronics sector, televisions 8 Hand-held televisions 20.8 and projectors were the best performers with volume 9 Converters, decoders and receivers 17.7 sales of nearly 14 million units in 2008. Demand for high 10 Digital cameras 15.0 definition television is slowly increasing among consumers who are seeking to replace their analogue Among portable consumer electronics products, mobile products with digital formats. phones were the market leaders with more than 54 million 2008 Middle East and Africa Market units sold in 2008. This represented a CAGR of 26.4% Performance between 2003 and 2008. Consumers in the Middle East In million units 150 50 and Africa are increasingly demanding fashionable mobile US$ million 40 phones with high mobile content capabilities. 100 30 Consumers in the Middle East and Africa bought more 50 20 desktops than laptops in 2008. Desktops accounted for 10 nearly 56% of overall computer volume sales. 0 0 Sales of in-car speakers led the in-car consumer 2003 2004 2005 2006 2007 2008 electronics sector. In 2008, in-car speakers generated Volume Value sales of US$142.5 million. 14
  15. 15. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 15
  16. 16. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Western Europe The 19% decline in the consumer confidence index in Consumer Confidence Index in Western Europe in 2008 was a response to the onset Europe January 2008 – January 2009 of the global economic downturn. Sales of expensive 0.0 products like in-home audio/video products and other -5.0 products related to entertainment will be the hardest hit over the forecast period as consumers begin to rein in -10.0 their spending on non-essential items. -15.0 In the wake of the current credit crisis, banks in the UK -20.0 have implemented stricter rules regarding the provision -25.0 of consumer credit, resulting in a decline in automobile -30.0 sales. In turn, sales performance in the in-car -35.0 consumer electronics subsectors will be affected. -40.0 High prices of in-home consumer electronics products, combined with the current high levels of personal debt, slowed sales growth in the subsector. In contrast, sales in the portable consumer electronics subsectors Germany France UK Eurozone remained relatively buoyant in Western Europe as consumers continued to demand products that Spaniards are increasingly moving to single-family informed and entertained them on-the-go. houses located on the outskirts of major cities. The With fewer children, Italians tend to have average commuting time spent going to and coming home from work (whether by public transport or by more disposable income to spend on private car) has increased considerably, driving consumer goods in general and on demand for portable media players and in-car media consumer electronics in particular, players. especially in-home products. 16
  17. 17. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Eastern Europe Eastern European countries face the continuing prospect of declining populations, declining birth rates, increased death rates and negative net migration, all factors that are Population expected to contribute to a negative impact on demand for Decline consumer electronic products. FDI into Eastern Europe and CIS countries declined in 2008-2009, exacerbating unemployment rates in countries Decreasing like Bosnia, Ukraine and Kazakhstan, among others. This, Shrinking CE Increasing Foreign Direct Market in turn, has led to a further decline in consumer unemployment Investments Opportunities confidence, forcing many Eastern Europeans to focus on priority expenditures rather than on consumer electronic products. A number of financial institutions in countries like Estonia, Unstable Ukraine, Croatia and Latvia have been directly affected by financial the US sub-prime mortgage crisis. CE companies linked institutions to these banks have had to consolidate unprofitable channels and review existing product lines in order to sustain profitable economies of scale. “Grey” market activities are affecting the The consumer electronics market in Eastern manufacturing of consumer electronics in Eastern Europe has been characterised by mergers among European countries. Illegal market operators offer very major market players and the development of low prices that domestic producers cannot match. franchises, resulting in more diversified product Multinational companies that have built factories in ranges and in companies expanding into the Eastern Europe also feel the influence of the illegal Russian market to increase their market shares. market, particularly in sales of portable CE products. 17
  18. 18. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >North America As a result of the credit crisis, access to consumer credit declined as banks tightened lending requirements. As a Sales of Exisiting Houses in the US consequence, the number of consumers who can borrow January 2008 – January 2009 Nov 4.5 to buy homes has decreased, and this has led to lower Oct 4.9 demand for in-home consumer electronics products. Sep 5.1 The slowdown in the US housing sector led to large Aug 4.8 increases in unemployment in 2008, and this is expected Jul 5.0 to continue into 2009. This situation has contributed greatly to the decline in consumer confidence and, in turn, Jun 4.9 it is expected to have a negative impact on consumer May 5.0 expenditure on durable goods and consumer electronic Apr 4.9 products. Mar 4.9 American Baby Boomers (those born between 1947 and Feb 5.0 1966), considered to be the wealthiest generation, are Jan 4.9 now approaching retirement. Their past interest in consumer electronics is likely to decline as they pursue 4 4.2 4.4 4.6 4.8 5 5.2 million other interests. The Generation Y demographic in North America The growth of private label products in North America (those now between the ages 13 and 31) has changed the relationship between the larger retailers emerged as an important driver of consumer and their supply base. When Best Buy and Wal-Mart expanded their private label offerings, their influence electronics sales. This group represents varying over suppliers increased. Power within the supply chain life stages, and thus they seek a diverse range of gradually shifted from traditional original equipment consumer electronics products. Regardless, as a manufacturers (OEM) to electronics manufacturing group their main focus has been on portable services (EMS) providers and original design electronics, such as mobile phones and MP3 manufacturers (ODM), who work directly with retailers to players. develop private labels. 18
  19. 19. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Latin America Falling remittances from Latin American workers in the USA had an impact on consumer spending in their home countries. Remittances are a crucial source of funding for many in Latin America. In particular, they often bolster household purchases of consumer electronics products in the region. Overseas Consumer demographics in Latin America are changing. The remittances increase in female employment has contributed to income and FDI growth in many households, and this has resulted in more disposable income being used to buy luxury items. Women consumers are driving demand for portable laptops, mobile phones and MP3 players with stylish designs. Product export The recession and the global concern regarding the mounting (services difficulties in the world financial markets has affected Latin and raw American consumers. Many take more time to consider what materials) are now important spending decisions, and this puts many consumer sectors at risk. The consumer electronics sector, however, may avoid this, as most of the products they offer deliver entertainment, communication or information, services Strong growth in credit cards, particularly that often allow consumers to escape the discomfort of store credit cards, is shaping the Latin uncertain and difficult times. American retail market. The financial sector has government support in this Fashion and technology have combined to effort as using financial instruments helps become a powerful force in driving the reduce the need and expense of printing introduction of new consumer electronics money. products in Latin America. 19
  20. 20. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Asia Pacific Economic growth in the Asia-Pacific region has turned Asia Pacific Equity Index Losses: lethargic as a result of the global economic slowdown. July 2007 - December 2008 Chinas stock exchange lost more than 47% of its value 60 in 2008 due to concerns about declining export demands and slower growth. This led to more caution 50 among consumer electronics manufacturers, many of Equity Index 40 which considered postponing research and development efforts (and costs) in order to focus on more pressing 30 business ventures. 20 An export-oriented economy, Japan has been particularly affected by the global economic slowdown, 10 resulting in a decline of 12.1% in annual real GDP 0 growth in the fourth quarter of 2008. This drop caused alarm among market players in Japan. Several companies with global market presences in the consumer electronics sector sought to redirect efforts towards reviewing existing marketing strategies to % decline sustain economies of scale.. Source: 2009 Euromonitor from Bloomberg Demand from „tween‟ (preteen) and teenage population groups in the Asia- Pacific region tend to influence the In most countries in the Asia-Pacific region, direction of marketing and product development efforts economies are primarily cash-based. This undertaken by major consumer electronics players. provides growth opportunities for mobile Demand from consumers in the region is polarized payment support structures which could, in between premium products, which provide an edge in computing and technology, and mass-based products turn, drive increased demand for more that cater to the lower end of market. sophisticated mobile phones. 20
  21. 21. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Australasia Employment Population in Australasia Australasia is in a better position to weather (2003-2008) the global financial crisis than other 8 developed regions. Labour markets are 7 tighter there than in Europe and the USA, and the region‟s main trading partners, 6 countries in the Asia-Pacific region, still expect growth in 2009.This has bolstered confidence among major consumer million 5 electronics players operating in the region, all 4 of whom intend on continuing to provide consumers with more formidable products 3 borne out of more confident marketing, research and technology. 2 Many Australians perceive urban lifestyles to 1 be increasingly uncomfortable, and many have decided to move to more affordable and 0 less stressful locations. Large population 2003 2004 2005 2006 2007 2008 shifts like these often drive new purchases and replacement purchases of consumer Male Female electronic products. While overall expenditure has been softening, anticipated strong employment figures may support increased consumption. Labour markets in the region remain tight and job losses are still anticipated, but they are expected to be low compared to other regions, which bodes well for the consumer electronics sector over the forecast period. 21
  22. 22. Regional Market Insights Consumer Electronics-Trends © Euromonitor International >Middle East and Africa Due to their relative insulation from the worlds Consumer Confidence in Selected financial system, countries in the Economies: 2006-2008 Middle East (except for UAE) and in Africa have 120 been among those least affected by current global Consumer Confidence Inex financial crisis. Because of this, major global 100 consumer electronics players are planning launches in the region to offset losses from underperforming 80 flagship products in other markets. Demographic features evident in most countries in 60 the region include rapid population growth and a 40 high proportion of young people in the total population. The Africa and Middle East region has 20 the youngest population among all of the worlds regions, and this is a sales opportunity, particularly 0 for portable CE products. Demand for laptops, 2006 1H 2006 2H 2007 1H 2007 2H 2008 1H 2008 2H mobile phones and portable multimedia players has increased. South Africa Saudi Arabia UAE Egypt Source: Mastercard Many parts of Africa lack political security, and this has scared off many major consumer electronics players from entering markets in the region. There are a number of “conflict situations” and domestic and cross-border disputes, with the situation in Darfur, Sudan being the best known. Political turmoil threatens economic progress in Chad, Côte dIvoire, Eritrea, Ethiopia, Guinea, Lesotho, the Seychelles, Somalia and Zimbabwe, and this has had an effect on the consumer electronics markets in these countries. 22
  23. 23. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 23
  24. 24. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Western Europe: Hi-tech and Green The introduction of flat-screen digital TV in Belgium drove increased sales of decoders that allowed consumers to adapt to digital TV at lower prices. Spain followed suit with the introduction of HDTV. As of March 2008, all manufacturers are required by the French government to offer only digital TVs. As an EU member, Greece is required to shift to digital broadcasting by 2012. Energy-saving and non-toxic products drove sales in Germany as concerns about global climate change heated up. “The Green Grid” initiative was introduced by processor company AMD and it clients HP, IBM and Sun. In Italy, mobile phones (3G handsets) drove sales the consumer electronics market, especially handsets with clamshell shapes, black design, high-resolution cameras, MP3 players and Bluetooth connectivity. In the UK, iPhones continued to see increased sales. 24
  25. 25. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Eastern Europe: Go Digital Poland intends to produce approximately 38 million TVs for the European market by 2010 in factories in Nowa Sola, Wroclaw, and Kobierzyce. With a focus on LCD technology, industry analysts claim Poland can be the „the counterpart of China‟ in Europe. Left Inset: A Toshiba production plant in Kobierzyce Photo courtesy of Toshiba Corp Sales of in-car DVD players strengthened the overall in-car consumer electronics market in Romania. Home theatre in a box (HTiB) continues to drive sales in the overall home cinema and speaker systems sector in Russia. 25
  26. 26. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >North America: Advancing Technology Private label brands in North America are expanding into portable consumer electronics. Wal-Mart offers multimedia players under its iLO and Siren brands while Best Buy offers its low-priced DVD and MP3 players under its Insignia brand. The availability of high-speed networks such as 3G (and potentially 4G) provides American consumers with the ability to stream video and access other advanced wireless features via their mobile phones. 4G Samsung P9000 Canadians increasingly replace their old CRT computer monitors with new LCD screens. 26
  27. 27. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Latin America: Looking for Cheaper Alternatives Flash drive memory, considered a cheaper alternative to hard drive and micro hard drive units, emerged as the preferred storage format in Argentina. Brazil rallied behind the production and sale of low-cost 3G mobile phones that offered internet connectivity, email and video features. Distributors in Chile and Mexico saw declines in unit prices of consumer electronics products as imported brands entered the market. 27
  28. 28. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Asia Pacific: Getting the Best in Technology Despite the introduction of several new competitive brands in the market, Chinese consumers still consider brand image (the combination of low price and high technology) as the fundamental reason to buy a product. India‟s multi-brand retail chains Croma, Vijay Sales and Vasanth & Co. gave consumers more options by providing a wider array of sophisticated electronic products. Having launched its Next-Generation Networks (NGN), Japan is now ready for the introduction of a long list of new electronic products. The government has developed a strategy that facilitates the entry of next-generation network-capable consumer electronics. NGN Process: Courtesy of Ericsson Corporation 28
  29. 29. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Asia Pacific: Getting the Best in Technology Taiwanese consumers preferred large LCD TVs screens, usually 37-inches or more. Local manufacturers are able to develop advanced products at lower material costs thanks to the ready supplies of TFT LCD panels in the country. Demand for premium consumer electronics products in Singapore was bolstered by the launch of HD television channels, as well as by the aggressive promotion of HDTV content and services by the government and industry players. The Malaysian government encouraged the adoption of the Terrestrial Digital Video Broadcasting (DVB-T) standard for broadcasting transmissions and rolled out digital transmission in and around Kuala Lumpur in 2009. It‟s hoped that it will expand nationwide by 2013. A DVB-T receiver commonly used in Malaysia. Demand in South Korea is for slim, compact and colourful mobile phones, reflecting the attractiveness of these products among younger consumers. 29
  30. 30. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Australasia : Balancing Technology and Environment The Australian government declared that all new TVs must comply with its 10-point energy ratings scheme that allows consumers to quickly see which television screens are best for energy consumption. Many environmentally conscious consumers are putting off purchasing new televisions until manufacturers demonstrate their environmental credentials. The entry of LG Electronics into the New Zealand market in 2007has allowed consumers there to enjoy fully the digital technology lifestyle. In 2009, the popular media device TiVo was launched in New Zealand. TiVo promises to turbocharge free-to- air digital TV and put viewers in control. Logo courtesy of Tivo Inc 30
  31. 31. Global Consumer ElectronicsTrends Consumer Electronics-Trends © Euromonitor International >Middle East and Africa: New Opportunities Lenovo‟s first attempt to enter the Middle East market was with its Idea Pad „Netbook‟ in 2008. The initiative confirmed the region‟s appetite for sophisticated technology. Idea Pad „Netbook‟ Touch screen technology is catching on in the Middle Eastern market. Sony Ericsson introduced its Xperia X1 mobile phone which boasts a full QWERTY keyboard and a three-inch touch screen. Sony Ericsson Xperia X1 mobile phone In South Africa, infrastructure development projects are underway in preparation for the 2010 soccer World Cup. These projects may pave the way for increased demand for a wide range of consumer electronics products over the next years. 31
  32. 32. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 32
  33. 33. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Western Europe Despite the continued prevalence of durable goods retailers in the region, hypermarkets have emerged as key distribution channel. Western Europe is undergoing channel transition, away from traditional mixed retailers and durable goods retailers. Hypermarkets are able to cross-subsidize expansion into non-traditional segments. They also wield increased bargaining power over manufacturers, resulting in lower prices and increased pressure of manufacturers‟ profit margins. A hypermarket in Spain Photo courtesy: Mondragon Corporation Durable goods retailers remained popular in the higher end of the market, where many consumers require personalised service. Many customers remain loyal to their local suppliers, especially those that provide comprehensive after-sales service and offer free product delivery and home service installation. A durable good retailer outlet in Belgium Photo courtesy: ADEG Österreich Handels AG Grocery retailers have been focused on products positioned in the lower and middle tiers of the sector. However, they are slowly integrating premium products into the mix in order to satisfy demand from the higher end of the market. A Tesco outlet in the UK Photo courtesy: Tesco Corp 33
  34. 34. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Eastern Europe Russian consumers increasingly preferred to buy CE products in specialist shops. This has encouraged the development of retail chains and has led to increased competition, which has resulted in lower prices and improved customer service. A computer electronics specialist store in Russia Hypermarkets and supermarkets are becoming the prevalent distribution channels in Eastern Europe. These retailers offer a wider range of electronic products, giving consumers more options and ensuring Rimi hypermarket in Latvia they get the best value for their money. Photo courtesy: Rimi Baltic Altex expanded its presence in Romania by increasing to 14 the number of stores it operates in the country. A retail chain store operated by Altex in Romania 34
  35. 35. Channel Analyses Consumer Electronics-Trends © Euromonitor International >North America Best Buy, Circuit City and Wal-Mart are the big players Kiosks revolutionized retail in the in the North American CE retail sector, offering US. Manufacturers and distributors consumers the widest array of consumer electronics placed kiosks in high-traffic areas brands. and improved channel‟s image among consumers. Dell kiosk (above), Sony kiosk (below) 35
  36. 36. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Latin America In Latin America, consumers preferred durable goods retailers, shopping in chain stores directly operated by major market players. Right inset: One of the 200 Red Megatone retail stores in Argentina. Brand loyalty is an influential factor in the Latin American CE market. Gradiente, Brazil‟s flagship brand, maintains traditional distribution sites as well as online site that offers consumers a wide range of consumer electronic products. A Gradiente webpage. Many Mexican consumers are attracted by the less expensive options offered by discounters such as Bodega Aurrera, Tiendas ISSSTE, Bodega Comercial Mexicana and Bodega Gigante. Bodega Aurrera in Mexico 36
  37. 37. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Asia Pacific Many major players in the Asia-Pacific market enthusiastically expanded their retail spaces in order to broaden their offerings of consumer electronics products. Gome and Suning became the biggest two specialist multiples in mainland China. Labi Akihabara: a five-story computer store in Akihabara, Tokyo Japan. Online retailing serve as an alternative distribution channel for most Asian consumer electronics retailers. The increasing popularity of using credit cards online allows retailers to improve sales in spite of intensifying market competition and global economic setbacks. 37
  38. 38. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Australasia Durable good retailers remain the most significant distribution channel in the Australasian CE market. The ability to provide customers with expert advice has made Harvey Norman one of the region‟s most popular chains. Photo courtesy: Harvey Norman Dick Smith Electronics and Dick Smith Powerhouse provide consumers with budget electronics that are initially launched by major manufacturers in the Australian market. Chains like 100% YES (Your Electronics Store), which has 60 stores located all over New Zealand, remain popular. Smaller family- operated ventures are also popular among New Zealand consumers. FAV, a small in-car electronics shop in New Zealand. 38
  39. 39. Channel Analyses Consumer Electronics-Trends © Euromonitor International >Middle East and Africa Durable good retailers continue to be the most popular distribution channel in the Middle East CE market. The entry of many big retail players contributed to the increase in the channel‟s distribution share over the review period. In 2008, the Landmark Group opened the Emax Big Box store, tagged as the largest multi-brand consumer electronics store in the Middle East. Emax Big Box channel store in Dubai. South African consumers have become more open to internet retailers and online shopping. Clemstone, e-dreams, Croma and i-mate are among the numerous popular online shops that offer varied consumer electronic products catering to all segments of the market. 39
  40. 40. Consumer Electronics-Trends © Euromonitor International >ScopeGlobal PerformanceRegional TrendsRegional Market InsightsGlobal Consumer Electronics TrendsChannel AnalysisCategory AnalysisCompetitive LandscapeFuture Trends and Developments 40
  41. 41. Category Analysis Consumer Electronics-Trends © Euromonitor International >In Home-consumer Electronics: Televisions and Projectors There was strong demand for High TVs and Projectors Definition televisions (HDTVs), Global Volume Performance particularly those with LCD and plasma (2003-2008 CAGR) flat panel displays, HD and Bluetooth 80.0 technology. 70.0 74.8 Plasma and LCD displays became the 60.0 61.4 most prevalent formats. Analogue 50.0 televisions disappeared from retail store shelves. 40.0 39.6 30.0 The strong development of the LCD TV 20.0 panel market has resulted in massive 17.3 10.0 investments in new production facilities -4.9 8.8 by manufacturers, increasing the 0.0 availability and driving down the costs -10.0 and thus making the products more attractive to consumers. Brand-name sellers of consumer electronics and PCs entering the LCD-TV subsector intensified competition and helped drive down prices. 41
  42. 42. Category Analysis Consumer Electronics-Trends © Euromonitor International >In Home-consumer Electronics: VCRs and DVD Players Global sales of VCR players dwindled while sales of VCR and DVD Players Global Volume DVD player peaked in 2008. Performance (2003-2008 CAGR) The growing popularity of digital broadcasting, cable VCR and DVD Video cassette TV services and the increased ability to download DVD players combinations recorders content from the internet drove global demand for 10.0 both VCRs and DVD players. 7.1 VCR/DVD combinations are disappearing from the 0.0 global market. Because of their "bridge" function 3.0 between VCR and DVD technologies, these -10.0 combinations have a slightly higher sales level than solely VCRs, but they are also an old technology -20.0 that is simply outdated and has little role to play in the modern digital age. -30.0 In 2008, Toshiba the primary company supporting HD DVD, announced that it would no longer -40.0 -45.3 develop, manufacture, or market HD DVD players and recorders. -50.0 Competition between Blu-ray DVD and HD DVD formats was intense, as the winner would determine the direction of future new product launches. Blu-ray had backing from Sony Pictures, Buena Vista, 20th Century Fox, Lions Gate, Warner Bros, New Line Cinema and Studio Canal. HD was supported by Universal Studios, Paramount, MTV Films, DreamWorks, The Weinstein Company, Image Entertainment, Magnolia Pictures, Brentwood Home Video, Ryko, Koch Entertainment and Goldhill Entertainment. 42
  43. 43. Category Analysis Consumer Electronics-Trends © Euromonitor International >In-home Consumer Electronics: TV and VCR/DVD Combo TV and VCR/DVD combinations are disappearing TV and VCR/DVD Combo Global Volume from the global market. Earlier launches tied VCR Performance (2003-2008) and DVD players to analogue televisions, 10,000 contributing to declining demand. 8,908.4 8,279.6 VCRs have become outdated, compelling 7,756.7 8,000 7,408.6 manufacturers to focus on other potential high- 6,430.2 growth areas. 5,868.0 „000 units 6,000 TV combination products did not spark consumers‟ interest, especially when such new products as 4,000 HDTVs were introduced into the market. Current demand for slim TV panels discourages 2,000 manufacturers from incorporating built-in players, except for an HD and USB slot. 0 2003 2004 2005 2006 2007 2008 TV and VCR/DVD combinations Leading manufacturers like Toshiba, Sharp, Westinghouse and Sylvania launched several sophisticated digital television and DVD combinations in the market in 2008, following the reasoning that some households continue to prefer these devices. In the final analysis, however, the only way to sell this these products in significant numbers is to Toshiba 22LV506 improve design and technology. 43
  44. 44. Category Analysis Consumer Electronics-Trends © Euromonitor International >In-home Consumer Electronics: Home Audio and Cinema Cinema and Home Speakers Value The introduction of HDTVs allows households to enjoy Sales (2003-2008) their LCD and plasma TVs in an almost cinematic experience. This has bolstered demand for home 120.00 cinema and speaker systems, which had sales of more than 22.2 million units in 2008. 100.00 The rise of home cinema complements DVD players. US$ billion Compact home cinema and speaker systems (Home 80.00 Theatre in a Box) allows consumers to maximize their living space and achieve total home entertainment. 60.00 Home cinema and speaker systems have become additions to modern-day interior, and manufacturers 40.00 are increasingly incorporating fashionable and attractive designs into their products to attract 20.00 customers. 0.00 Philips’ recently launched Ambisound 2003 2004 2005 2006 2007 2008 HTS8100 compact home cinema system does not require five speakers to allow users to The most important factor influencing enjoy the cinema experience, as it is performance in the home audio and cinema contained within a 15cm box, known as sector has been the development of “home cinema culture” in combination with advances Sound Bar. Onkyo TX-SR605 is the first AV other sectors like television and projectors and receiver to include HDMI 1.3 and to read DVD players, all of which can be integrated into new sound formats such as DTS-HD and home cinema systems. Dolby True HD. 44
  45. 45. Category Analysis Consumer Electronics-Trends © Euromonitor International >In-home Consumer Electronics: Personal Computers Global sales of personal computers have been affected by increased demand for replacements, Personal Computer Volume particularly new products with higher memory Performance 2003-2008 capacity, flat-panel monitors and a wider range of 750 hardware and software capabilities. Volume sales of personal computers grew at a CAGR of nearly 10% 650 million units between 2003 and 2008. 550 Gender and age became factors among consumers shopping for personal computers. Colourful 450 computers and peripherals attracted younger 350 consumers and women, while professionals and older consumers tended to prefer classic and more 250 compact designs. 150 Personal Computer Value Performance 50 (2003-2008) 160 2003 2004 2005 2006 2007 2008 140 Computer peripherals Desktops US$ million 120 100 80 60 Larger LCD monitors bolstered volume sales of 40 personal computer peripherals. During the review 20 period, computer users increasingly used their PCs 0 not only to work and surf the internet but also for 2003 2004 2005 2006 2007 2008 personal movie viewing. Desktops Computer peripherals 45
  46. 46. Category Analysis Consumer Electronics-Trends © Euromonitor International >Portable Electronics: Cameras Volume Demands of Cameras Digital single-lens reflex cameras (DSLR) were the (2003-2008) most dynamic products in the sector. In contrast, analogue cameras disappeared, although there is 105 still slight demand from traditional photographers. 85 Compact and lightweight cameras with higher million units memory capacities continue to drive digital camera 65 sales. Global volume sales of digital cameras 45 reached more than 124 million units in 2008. 25 The increased popularity of camera phones continues to challenge camera sales, particularly at 5 the low end of the market. 2003 2004 2005 2006 2007 2008 Analogue cameras Digital cameras There has been increasing demand for the new point-and-shoot cameras laden with advanced technological features, such as face detection, wireless IR technology, dust reduction, in-camera image stabilization and splash-proof technology. Manufacturers are also ramping up the competition in terms of megapixel sizes. Canon Power Shot E1 was Global Sales of Photo Printers (2003-2008) launched as a 20 more compact millions 10 digital camera 0 than preceding models. 2003 2004 2005 2006 2007 2008 46
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