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CES 2017 Exploring the Global Consumer Tech Industry

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Senior director of market research at CTA, Steve Koenig, gives an overview on the future of the global consumer tech industry.

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CES 2017 Exploring the Global Consumer Tech Industry

  1. 1. Exploring the Global Consumer Tech Industry Steve Koenig Senior Director, Market Research @KoenigSteve Go here for slides: CTA.tech/salesandforecasts You Are Here #CES2017
  2. 2. Retail CE sales tracking at more than 340,000 retail stores in 80 countries. U.S. sell-in (shipments) data for dozens of CE categories on a monthly basis. + = Global Consumer Technology Spending Forecasts
  3. 3. Consumer Electronics ● Audio and Video Accessory ○ Headphone ○ Universal Remote Control ○ Docking Speakers ◦ Bluetooth Pairing Speakers only ◦ Docking Speakers Excl. Bluetooth Pairing only ● Auto Multimedia ○ Car Entertainment ◦ Car Audio ◦ Car Speaker ◦ Car Vision ◦ Fixed Car Navigation ○ Portable Car Navigation ● Home Audio ○ Audio Home System ◦ Home Theatre System ◦ Music System ○ Hi-Fi Single Element ○ Loud Speaker ◦ Hi-Fi Loudspeaker ◦ Soundbar Speaker Product Categories ● Home Video ○ Home DVD Player and Recorder ◦ Home DVD Player ◦ Home DVD Recorder ○ Home HD DVD+ Blu Ray ● Personal Audio ○ Portable Media Player ○ Radio Devices ◦ Clock Radio ◦ Portable Radio ◦ Radio Boombox ● E-Reader ● Recording Media ○ Memory Card ○ Other Recording Media ◦ CD R ◦ DVD R ○ USB Memory
  4. 4. Consumer Electronics ● TV ○ LCD TV ◦ 3D LCD/LED TV ◦ LED TV ◦ Smart LCD/LED TV ○ CRT TV ○ Plasma TV ◦ 3D Plasma TV ◦ Smart Plasma TV ● TV Set-Top Box ● Videogame Console Product Categories IT ● Monitor ● Other PC Peripherals ○ External HDD ○ Keying Device (Keyboard) ○ PC Speaker ○ Pointing Device (Mouse) ● PC ○ Desk PC ◦ All-in-One PC ◦ Desk PC (ex AIO) ○ Mobile PC ◦ Netbook PC ◦ Notebook PC ◦ Computing Tablet ○ Media Tablet ● Printing ○ Printer ○ Printer Cartridge
  5. 5. Photo ● Digital Camcorder ○ Action Camera ○ Digital Camcorder ex-Action Camera ● Digital Still Photography ○ Digital Still Camera ◦ Compact Camera ◦ Compact System Camera (Mirrorless) ◦ DSLR Camera ○ Interchangeable Lens Product Categories Telecom ● Mobile Handsets ○ Mobile Phone ○ SmartPhone ● Other Telecom ○ Headset ◦ Headset ex-Mobile Stereo ◦ Mobile Stereo Headset ○ Line Phone ◦ Fixed Line Phone ◦ Mobile Line Phone ● Wearables ○ Health & Fitness Tracker ○ Smart Eyewear ○ Smartwatch ○ Wrist Sport Computer ○ Locator ○ Connected Watch ○ Hearables
  6. 6. Analysis Considerations: Geographical, Financial • North America • Western Europe • Developed APAC • Exchange Rates (FX) • Sales Tax • Tech Subsidies • Central /Eastern Europe • Latin America • Emerging APAC • Middle East/ Africa Developed Emerging
  7. 7. 0.81 0.96 6.94 118.50 1.34
  8. 8. 2016: The Year of the Unexpected
  9. 9. Global Economic Picture 6% 6% 5% 4% 4% 4% 13% 12% 11% 11% 12% 12% 17% 18% 19% 21% 22% 22% 8% 8% 8% 7% 7% 7% 8% 8% 8% 8% 7% 7% 24% 24% 25% 27% 27% 27% 23% 23% 24% 22% 22% 21% 2012 2013 2014 2015 2016Fcst 2017Fcst GDP* distribution by Region - USD C&E Europe/CIS Developed Asia Emerging Asia Latin America Middle East & Africa North America Western Europe * Source: IMF, OCT 2016 World GDP 2016 = 3.1% 2017 = 3.4%
  10. 10. 2017 Global Economy: Realignments, Long-Term Trends, New Shocks • Uncertainty underscores outlook • Brexit, trade risks and Trump • Some firming of commodities pricing • Sentiment toward emerging markets improving – Asia looking strong • Advanced economies wrestle with new political landscape – USA, UK, Korea, Brazil • China: consumer spending strong, capital spending weak
  11. 11. Technology’s Magnificent Seven 2015 = 79% 761 billion USD 2016 = 78% 740 billion USD Share: Total: Global Source: GfK/CTA Digital World
  12. 12. Technology’s (New) Magnificent Seven 2017 = 81% 754 billion USD Share: Total: Global
  13. 13. Mobility Makes the World Go Round 25% 23% 23% 21% 19% 18% 38% 35% 34% 31% 29% 29% 4% 4% 3% 3% 2% 2% 33% 38% 40% 46% 50% 51% 2012 2013 2014 2015 2016fcst 2017fcst Global Digital World Values (USD) share by Category Smartphones 47%
  14. 14. Smartphones: Super Massive 61 38 24 14 11 9 260 352 379 401 431 432 17% 21% 3% 3% 6% 0% -10% -5% 0% 5% 10% 15% 20% 25% 0 50 100 150 200 250 300 350 400 450 2012 2013 2014 2015 2016fcst 2017fcst Global Mobile Values (USD bn) 390 402 416 442 441 321 Smartphones Standard Phones
  15. 15. Global Handset Volumes Steady (Units in Millions) 920 735 594 476 421 370 673 1,004 1,231 1,320 1,399 1,444 8% 9% 5% -2% 1% 0% -10% -5% 0% 5% 10% 15% 20% 25% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2012 2013 2014 2015 2016fcst 2017fcst Mobile Phone SmartPhone y/y Mobile 1,742 1,825 1,796 1,819 1,814 1,597
  16. 16. Smartphones Value Share by Region (USD) Latin America 7% C&E Europe/CIS 4% North America 18% Emerging Asia 39% Middle East & Africa 10% Western Europe 12% Developed Asia 10% Developed 40% Emerging 60%
  17. 17. 2011 2012 2013 2014 2015 2016 2017 Think Globally, Connect ‘Mobilly’ Global Tech Device Sales Revenue 51% Other Device Categories Smartphones and Tablets 63% 2017 Tech Spending 586 Billion USD Smartphones Tablets Mobile PCs Source: GfK/CTA Digital World 22% 44%
  18. 18. Global Tablet Volumes Trending Lower (Units in Millions) 125 196 223 185 150 136 2012 2013 2014 2015 2016fcst 2017fcst
  19. 19. Have Global PC Volumes Crested? (Units in Millions) 127 114 109 96 87 81 196 184 183 173 167 163 125 196 223 185 150 136 12% 10% 4% -12% -11% -6% -20% -15% -10% -5% 0% 5% 10% 15% 20% 0 100 200 300 400 500 2012 2013 2014 2015 2016fcst 2017fcst 493 515 454 404 380 449 -19% -14% -9% -4% 1% 6% 0 50 100 150 200 250 Media Tablet Mobile PC Desk PC y/y PC
  20. 20. Tablet Declines Impact Global PC Revenues (Revenues in Billions USD) 81 72 69 59 53 50 143 134 132 115 114 111 58 68 67 48 38 34 1% -3% -2% -18% -7% -5% -20% -15% -10% -5% 0% 5% 10% 15% 20% 0 50 100 150 200 250 2012 2013 2014 2015 2016fcst 2017fcst 273 268 221 205 195 282 -19% -14% -9% -4% 1% 6% 0 50 100 150 200 250 Media Tablet Mobile PC Desk PC y/y PC
  21. 21. Developed Regions Dominate Mobile PC Sales 778 749 731 726 723 664 684 679 2010 2011 2012 2013 2014 2015 2016 2017 Latin America 3% C&E Europe/CIS 4% North America 32% Emerging Asia 20% Middle East & Africa 10% Western Europe 20% Developed Asia 11% Mobile PC Values share by Region (USD) Developed 63% Emerging 37% Avg. Selling Price (USD)
  22. 22. Global TV Volumes Leveling Off (Units in Millions) 210 220 235 230 225 227 20 11 613 10 8 -8% 0% 3% -5% -3% 1% -20% -15% -10% -5% 0% 5% 10% 15% 20% 0 50 100 150 200 250 2012 2013 2014 2015 2016fcst 2017fcst 242 249 235 228 229243 3 OLED Plasma CRT LCD y/y TV
  23. 23. Smaller Screens = Bigger Viewing Profile 62% 51% 16% 21% 5% 12% 14% 8% 3% 7% 1% 2% 2012 2016 Television Smartphone Laptop Desktop Tablet Other Source: The Evolving Video Landscape (2012) Source: 2016 Video Study USA: Average Share of Video Viewing on Each Device
  24. 24. Global 4K UHD Sales Volumes (in Millions) 10.2 31 52.7 81.9 2014 2015 2016 2017 Source: GfK
  25. 25. The New Normal for TV (Revenues in Billions USD) 127 132 135 119 106 102 3 11 8 5 -12% 0% 0% -14% -11% -3% -20% -15% -10% -5% 0% 5% 10% 15% 20% 0 20 40 60 80 100 120 140 2012 2013 2014 2015 2016fcst 2017fcst 141 141 122 108 105 141 3 OLED Plasma CRT LCD y/y TV
  26. 26. Global Wearables Market In High Gear (Units in Millions) 26 45 66 87 19 38 75 7 8 11 14 122% 58% 50% 0% 20% 40% 60% 80% 100% 120% 0 20 40 60 80 100 120 140 160 180 2014 2015 2016fcst 2017fcst 35 77 122 184 3 Others Wrist Sport Computer Smartwatch Health & Fitness Tracker y/y Wearables Western Europe and China key markets to watch in 2017, as they gain on the U.S. market’s early wearables lead
  27. 27. VPS 16 eye-tracking glasses Gear S3 smartwatch Spartan Boxer Brief
  28. 28. Wearables: Double-Digit Revenue Growth (Revenues in Billions USD) 2 3 4 51 4 8 12 1 1 1 2 1 2 3 130% 59% 41% 0% 20% 40% 60% 80% 100% 120% 0 5 10 15 20 25 2014 2015 2016fcst 2017fcst 9 15 4 21
  29. 29. REGIONAL FOCUS
  30. 30. Latin America – Tech Spending Analysis 444 426 412 344 294 281 -8% -4% -3% -16% -15% -4% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 50 100 150 200 250 300 350 400 450 2012 2013 2014 2015 2016fcst2017fcst Units (M) 69 73 77 54 58 50 -15% 6% 6% -30% 8% -14% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 10 20 30 40 50 60 70 80 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  31. 31. Latin America | Seeking Economic Redemption? • Brazil – tough recession, infrastructure • Argentina – more economic weakness • Venezuela – soaring inflation • Economic challenges dim 2017 outlook for tech spending • Telecoms is expected to return to growth in 2017, while the other main categories continue to decline • Some emerging product markets are still small
  32. 32. North America – Tech Spending Analysis 1,310 1,242 1,274 1,303 1,276 1,272 -4% -5% 3% 2% -2% 0% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 200 400 600 800 1,000 1,200 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 220 236 231 234 225 223 -4% 7% -2% 1% -4% -1% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 50 100 150 200 250 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  33. 33. North America | Three Amigos? • USA – CCI=113.7 highest since 2001. Employment/wages, spending and interest rates up. • Mexico – modest growth. Crime, corruption, immigration issues present headwinds. • Canada – impact of oil slowdown. Trade with USA and EU to rise. • Demand for 2017 revised up, driven by expected improvement in smartphones and PC demand. • Revenue decline expected to moderate slightly due to increasing ASP’s within main sectors • Wearables and audio products are among the fastest growing products.
  34. 34. Western Europe – Tech Spending Analysis 1,300 1,227 1,218 1,166 1,129 1,126 -5% -6% -1% -4% -3% 0% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 200 400 600 800 1,000 1,200 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 195 194 195 166 162 158 -8% 0% 0% -15% -2% -2% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 50 100 150 200 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  35. 35. Western Europe | Mind the Gap • Brexit impact and potential aftershocks still unclear • EU public debt; immigration tensions spark nationalism • More headwinds to economic growth than tailwinds • Smartphones sales stable. Softening demand for other major categories. • Streaming video adding new life to living room entertainment.
  36. 36. C&E Europe – Tech Spending Analysis 568 550 520 432 414 408 3% -3% -6% -17% -4% -1% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 100 200 300 400 500 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 64 65 59 40 41 40 2% 1% -8% -32% 1% -2% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 10 20 30 40 50 60 70 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  37. 37. C&E Europe | Going for Growth! • Central and Eastern Europe economy growing steadily at 3.0%. EU development funds to fuel more growth although currencies pressures present headwinds. Trade tightening could hurt. • Ukraine and Russia remain in focus 2017. • Marginal improvement in tech end-demand in most countries. 2016 revenue gains defined by smartphones and LCD TV. • Replacement cycles quickening. Sales orient towards higher-end devices with better user experience and higher ASP. • Growth continues for emerging products like wearables.
  38. 38. Emerging Asia – Tech Spending Analysis 1,877 1,922 1,936 1,835 1,830 1,816 4% 2% 1% -5% 0% -1% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 249 276 276 279 286 280 10% 11% 0% 1% 2% -2% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 50 100 150 200 250 300 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  39. 39. China = fully developed tech market • China • Malaysia & Vietnam Utility / Productivity • Indonesia • Philippines Communication / Information • Tech is fully integrated into daily life & used for enjoyment / entertainment • Few barriers other than access to brands • Robust channels – online purchasing • Tech use more basic – supports communication & productivity • Markets still developing in terms of: • Internet • Channels – largely in-store purchase which may contribute to limited access Entertainment
  40. 40. Emerging Asia | Growth Beyond China • China GDP 6.4% in 2017 as turn toward service/innovation economy continues. • India is the new China. GDP growth 7.5% through 2020. • Other countries seeing lift in end-demand. Chinese brands capitalizing. • Smartphones dominate the tech landscape. • Bifurcated strategy: budget phones and high-performance models. • Among fastest-growing products are 4K Ultra HDTV, action cameras, wearables and audio products. June 7-9, 2017 Shanghai, China
  41. 41. Developed Asia – Tech Spending Analysis 659 641 643 604 593 595 -8% -3% 0% -6% -2% 0% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 100 200 300 400 500 600 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 128 116 110 96 98 96 -4% -10% -5% -13% 2% -1% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 20 40 60 80 100 120 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  42. 42. Developed Asia | Active Aging with Technology • Weakness moderates in all key countries, 2017 outlook for Japan GDP growth is positive, but still historically low. • South Korea moving past political scandal • PC sales improving; smartphone outlook stable. • Photo declining. • Wearables seeing strong growth. • High adoption of active aging tech?
  43. 43. Middle East & Africa – Tech Spending Analysis 676 700 707 705 675 688 9% 4% 1% 0% -4% 2% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 0 100 200 300 400 500 600 700 2012 2013 2014 2015 2016fcst 2017fcst Units (M) 78 85 92 85 80 81 10% 9% 7% -7% -6% 1% -40% -30% -20% -10% 0% 10% 20% 30% 40% 0 20 40 60 80 100 2012 2013 2014 2015 2016fcst 2017fcst Values (USD bn)
  44. 44. Middle East & Africa | Hope for Peace • Conflicts across the region continue to create headwinds to growth. • 2017 outlook remains positive, driven by improved demand in a some countries, as UAE and Egypt. • Smartphones domination of tech landscape even more pronounced here. • Rising competition driving down prices, but also revenues.
  45. 45. Global Tech Spending Share by Region 7% 7% 7% 6% 6% 5% 6% 6% 6% 4% 4% 4% 22% 23% 22% 25% 24% 24% 25% 26% 27% 29% 30% 30% 8% 8% 9% 9% 8% 9% 19% 19% 19% 17% 17% 17% 13% 11% 11% 10% 10% 10% 2012 2013 2014 2015 2016fcst 2017fcst Developed Asia Western Europe M.E. & Africa Emerging Asia North America C&E Europe Latin America
  46. 46. Global Consumer Tech Unit Sales Leveling Off (in Millions) 6,835 6,708 6,711 6,389 6,211 6,187 -1% -2% 0% -5% -3% 0% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2012 2013 2014 2015 2016fcst 2017fcst Units y/y
  47. 47. Global Consumer Tech Spending (Billions of USD) 1,005 1,045 1,040 955 950 929 -1% 4% -1% -8% -1% -2% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 0 200 400 600 800 1,000 2012 2013 2014 2015 2016fcst 2017fcst Values (USD) y/y
  48. 48. Why is Global Tech Spending Lower? • Strong dollar unfavorable to conversion of global currencies. – Global GDP growth of 3.4% in 2017 – China growth moderating, Euro and Yen weak • Volume growth flat / negative in core categories: Smartphones, PCs, TVs – Tablets units down 10% in 2017 • Retail prices trending lower in categories with big impact: – Smartphones (-3%); TV (-5%); Laptops (-1%) • Uncertainty underscores outlook for end-demand – Geopolitical (Trump, Russia); Trade risks (TPP, Brexit), Commodities pricing (Oil)
  49. 49. Steve Koenig Senior Director, Market Research @KoenigSteve Go here for slides: CTA.tech/salesandforecasts Closing Announcements

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