Global technology spending is forecast to continue growing but at a slower pace as unit sales level off. Emerging markets now account for over 70% of smartphone sales and nearly half of tablet sales, driving the global shift away from mature markets. Within devices, mobile devices led by smartphones and tablets will continue to dominate spending, comprising over 75% of the global market in 2016. However, new categories like smart home devices, VR/AR, and drones are poised for future growth.

1. Global Technology Market Update
TECHNOLOGY WORLD TOUROFF-PEAK|RETURN
Steve Koenig
Senior Director, Market Research
@KoenigSteve | skoenig@CE.org

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.
+ =
Digital World:
Global Consumer Technology
Spending Forecasts

3. 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
Mature Developing

4. GLOBAL MARKET:
Global Technology Spending – On Track?

5. Global Tech Unit Sales Leveling Off
(in Millions)
Global Tech Device Sales Volume
Source: GfK/CTA Digital World

6. Global Tech Spending Forecast
(Billions of USD)
Global Tech Device Sales Revenue
Source: GfK/CTA Digital World

7. Reasons for Declining Tech Spending
• Strong Dollar unfavorable to conversion of global currencies.
• ASPs trending lower in categories with big impact:
– Smartphones (-7%); TV (-2%); Laptops (-4%)
• Global unit growth moderate or negative in key sectors.
– TV (1%); smartphones (8%); Laptops (-3%); Tablets (-8%)
• Economic weakness in several emerging markets:
– Latin America, Central/Eastern Europe
• China slowdown
– transitioning to consumption/services; spillover effects on commodity
dependent economies.

8. Comparisons With Adjacent
Global Industries
• Semiconductors: Capital spending -1% in 2015 to $64 billion
• Consumer Appliances: 2% volume growth in 2016
• Automotive: 2015 - 2-3% growth to 91 million cars
• Furniture: 2.2% consumer spending growth
• Toys: Spending grew 6% (+$1 billion) in 2015
• Fitness Equipment: 4% CAGR to reach $12 billion by 2020
Source: Gartner 10/15
Source: Euromonitor 11/15
Source: OICA 3/15
Source: Euromonitor 11/15
Source: NPD Group 12/15
Source: Allied Market Research 10/15

9. How Innovation Is Reshaping the
Global Consumer Tech Industry
• New/Nascent Categories Poised for Global Growth:
– Smart Home tech, VR/AR, Drones, 3D printing, digital
health devices, automotive, robotics … and many more.
– Keys: promote innovation, free trade, open markets
• Where to See Consumer Tech Innovation:
– CES is the global stage.

10. DEVICES:
Still Riding High?

11. Technology’s Magnificent Seven
2015 = 79%
761 billion USD
2016 = 78%
740 billion USD
Revenue Share:
Revenue Total:
Source: GfK/CTA Digital World

12. It’s a Mobile, Mobile, Mobile, Mobile World
Global Tech Device Retail Sales Units and Revenue in Billions of $
Source: GfK/CTA Digital World

13. One Phone to Rule Them All
Source: GfK/CTA Digital World

14. Wearables demand surges,
largely due to Developed markets and China
Global Tech Device Retail Sales Units and Revenue in Billions of $
Source: GfK/CTA Digital World

15. 2011 2012 2013 2014 2015 2016f
Mobile Devices Dominate Spending
Global Tech Device Sales Revenue
Source: CEA / GfK Digital World
46%
Other Device Categories
Smartphones and Tablets
58%
2016 Tech Spending
551 Billion USD
Smartphones
Tablets
Mobile PCs

16. History Repeats Itself
1st Roman Triumvirate Technology’s Triumvirate
Lasted from 60 B.C. to 53 B.C. How long will it last?

17. Unit Growth Story Has Been Mixed …
Global Sales YoY Growth by Product
Source: GfK/CTA Digital World

18. … And It Remains Mixed in 2016
Global Revenue Growth by Product
Source: GfK/CTA Digital World

19. Global Tablet Unit Sales, Forecast (M)
16
60
126
197
224
192
176
2010 2011 2012 2013 2014 2015 2016f
+110% +56% +14% -14% -8%+275%
Source: GfK/CTA Digital World

20. Global Smartphone Unit Sales, Forecast (M)
268
431
655
994
1,225 1,309
1,414
2010 2011 2012 2013 2014 2015f 2016f
+23%+49% +7%+54%+61% +8%
Source: GfK/CTA Digital World

21. Global Market: 2010 2011 2012 2013 2014e 2015f 2016f
Global Unit Volume (000s) 267,503 431,322 665,074 994,180 1,225,337 1,308,900 1,414,255
Developed Markets 60% 51% 41% 32% 30% 30% 29%
Emerging Markets 40% 49% 59% 68% 70% 70% 71%
Smartphones:
Emerging Markets Claim More Share
Source: GfK/CTA Digital World

22. Smartphones - Global ASP Trend (USD)
440
420
381
333
310
(-7%)
305
(-2%) 283
(-7%)
2010
2012
2015
2016
Source: GfK/CTA Digital World

23. Global Tablet Unit Sales, Forecast (M)
16
60
126
197
224
192
176
2010 2011 2012 2013 2014 2015 2016f
+110% +56% +14% -14% -8%+275%
Source: GfK/CTA Digital World

24. Developing Markets Driving Tablet Sales
Global Market: 2010 2011 2012 2013 2014e 2015f 2016f
Global Unit Volume
(000s)
15,982 59,929 125,723 197,250 224,440 191,876 175,876
Developing Markets 4% 19% 30% 42% 49% 48% 48%
North America 71% 50% 39% 28% 25% 26% 26%
Other Developed
Markets
26% 30% 31% 30% 25% 26% 26%
Source: GfK/CTA Digital World

25. Global Tablet ASP
685
599
457
347
294
(-7%) 250
(-15%)
228
(-9%)
2010
2012
2015
2016
Source: GfK/CTA Digital World

26. LCD TV – All Hail the King of Screens
Source: GfK/CTA Digital World

27. Global LCD TV – Avg. Size Gains
34.7''
36.2''
37.7''
39.3''
40.4''
42.1''
2011 2012 2013 2014 2015F 2016F
Source: GfK/CTA Digital World

28. 0.7m
6.0m
13.4m
19.9m
0.2m
4.1m
16.6m
28.2m
4.3%
13.1%
20.9%
0%
5%
10%
15%
20%
25%
0
10
20
30
40
50
60
2013 2014 2015E 2016F
China
ROW
Global 4K
penetration
Global 4K Ultra HD Unit Forecast
10.1m
40m
48.1m
Source: GfK/CTA Digital World

29. REGIONAL ANALYSIS:
Spending Growth Picture
Remains Mixed

30. Has Emerging Asia Share Peaked?
Source: GfK/CTA Digital World

31. 2012 2014
Mature Markets
Developing Markets
$564
bn
54%
49%
$$593
bn
2013
Global Tech Spending Searching
for Equilibrium
Global Tech Device Retail Sales Revenue Share
51%
49%46%
14%
51%
2015
48%
52%
2016 Fcst.
49%
51%
Source: GfK/CTA Digital World