global ce sales & forecastsglobal ce sales & forecasts tim herbert senior director, research...

Global CE Sales & Forecasts

Tim Herbert

Senior Director, Research

Consumer Electronics Association

[email protected]

A Look at the Key Drivers, Disruptors and Developments of the Global CE Market

mailto:[email protected]

Methodology

The global revenue data found in this presentation is at the RETAIL level, or the value of the product sold at retail. In contrast, the U.S. market revenue data found on the previous pages of this publication is presented at the WHOLESALE level, or the value of product shipped from the manufacturer to the retailer.

The Worldwide Consumer Electronics Sales & Forecast report is produced jointly by the GfK Group and CEA. CEA estimates the North American market based on their weekly/monthly MARA sales data program. GfK measures/ estimates sales for the rest of the world using its extensive reach and operations in over 100 countries. Any sales data used from this presentation should be sourced as CEA/GfK.

About GfK Group:The GfK Group is one of the largest market research companies in the world. The Group has a staff complement of 10,000+ employees working in 115 operating companies covering more than 100 countries of the world who deliver the knowledge on markets and sectors which our clients in industry, retail, the media and the service sector need for their decisions. Visit www.gfk.com for more information.

International consumer research used in this presentation was collected by the Consumer Electronics Association from surveys fielded in 2007 or 2008.

http://www.gfk.com/

The Global CE Market: the Big Picture

$455

$534

$611

$694$724

2005 2006 2007 2008 2009

Global CE Sales to Top $700 Billion in 2009

+17.5%

over 2005

+14.3%

over 2006

+13.7%

over 2007

+4.3%

over 2008

[forecast][estimate]

Sales through consumer retail channels | Retail Dollars | USD $ billions

In 2009, approximately 2.5 billion CE products (sans accessories) will be sold

Global Pie Roughly Evenly Divided in Thirds

12.3%

11.0%

7.7%

17.4%

9.3%

4.8%2.1%

20.3%

15.2%

Asia &

OceaniaAmericas

EMEA

North America

South & Central America Asia (less China & Japan)

Western EuropeMiddle East

Eastern Europe

China

Japan

Africa

Expected 2009 distribution of worldwide CE revenue (at retail level)

BRIC Countries a Major Growth Driver

24.0%

74.0%Rest of world

BRIC countries

Based on 2008 revenue estimates

China captures the largest share of CE sales among the BRIC countries, followed by Russia and Brazil (tie) and then India.

Understanding the Evolving Product Mix

2005 2006 2007 2008

17.0% 15.0% 15.0% 15.0% Other CE products

8.9%8.5% 9.8% 10.9%

7.9%7.2% 6.8% 5.5%

Desktop PC

Laptop PC5.0%

9.0% 12.3% 15.0%3.3%

3.8%3.2%

11.8%

8.5% 5.7% 4.0%2.8%

Other TV

Plasma TV

LCD TV24.8% 25.5% 25.2% 26.7%

Mobile phone

Camcorder

Digital camera

6.4%6.2% 5.7% 5.3%

GPS

Printers

DVD

MP3 portable

Monitors

Game console3.0%

2.5%

2.3%

2.3%

1.8%

1.6%

Based on Revenue USD $

A Look at the Details

Mobile Phones: Growing but Not as Fast

Unit sales of mobile phones, millions

+13.0%

+2.1%

+15.4%

N. America

S. America

Japan

Eastern EU

20092008

Unit growth rates by region

Change in Revenue Allocation, ’08 vs. ‘09

W. EU E. EU Africa ME Asia China Japan S. America N. America

Mobile Phones Down Down Down Down Down Down Up Down Up

Note: ‘down’ doesn’t necessarily mean the category is declining, but rather it means it’s a smaller percentage of the total compared to the previous year.

• Asia (less China), China, and Western EU are the top three markets for unit sales of mobile phones.

• Consumers in Africa and the Middle East allocate the highest percentage of their CE purchases (revenue) to mobile phones. This is followed by Asia (less China) and China.

• Western EU and North America allocate the lowest percentage towards mobile phones.

• Japan is expected to have the greatest increase in allocation to mobile phones in 2009.

• North America market undergoing transition to smartphones; 31% unit growth expected in 2009.

Bahrain Egypt Kuwait

1). Mobile phone Mobile phone Mobile phone

2). Laptop PC Desktop computer Laptop PC

3). Digital camera Digital camera Desktop computer

4). Desktop computer Portable MP3/DM player Digital camera

5). Portable MP3/DM player Laptop PC Portable MP3/DM player

6). Flat panel TV Flat panel TV Video game console

Qatar Saudi Arabia United Arab Emirates

1). Mobile phone Mobile phone Mobile phone

2). Laptop PC Laptop PC Laptop PC

3). Desktop computer Desktop computer Digital camera

4). Digital camera Digital camera Portable MP3/DM player

5). Portable MP3/DM player Video game console Desktop computer

6). Flat panel TV Portable MP3/DM player Flat panel TV

Purchase intent over the next 2 years

Base: Middle East’s Persian Gulf online consumers

Middle East Purchase Intent

13%

14%

30%

34%

51%

51%

58%

59%

63%

77%

84%

86%

Voice-mail

GPS (location-based service)

Email

Web browsing

Watching videos

Downloading ringtones

Video camera

Listening to music

International calling

Camera

Text messaging

Local calling

Emerging Mobile Phone Power Users

Persian Gulf mobile phone

users are most satisfied with

their phone’s ease of use

(83%) and features (71%).

Women are slightly more

satisfied with their mobile

phone then men.

Conversely, they are least

satisfied with web browsing

capabilities (38%) and

carrier fees (34%)

Base: Middle East’s Persian Gulf online consumers

Mobile phone features used by Persian Gulf consumers

TVs: the Ongoing Transition to Digital

Unit sales of Televisions, millions

+10.5%

+2.6%

+9.1%

Western EU

20092008


China

Middle East

Africa




TV Down Up Up Up Up Up Down Down Down


• North America, Western EU and South America are the top three markets for unit sales of televisions.

• LCD displays will grow slower in 2009 but will still achieve double digit unit and revenue growth worldwide. Plasma displays are forecast to achieve positive unit growth and negative revenue growth. CRT and projection televisions are expected to be down for both units and revenue as consumers continue to embrace HDTV and flat panel displays.

• Consumers in China, Japan, Western EU and North America allocate the highest percentage of their CE purchases (revenue) to television.

• South America and Asia (less China) allocate the lowest.

• The largest increase in allocation toward television is expected to come from Eastern EU and the Middle East.

Consumers Embrace Laptop PCsUnit sales of PCs, millions

+17.8%

+8.2%

+19.9%


Africa

20092008





PC Up Up Down Down Up Up Down Up Down


• Laptop PCs are expected to continue to generate double digit increases in units and revenue in 2009. Desktops will experience declines in both units and revenue.

• In 2005, the ratio of desktop PC unit sales to laptop PC unit sales was 58% to 42%. In 2009, it’s expected the ratio will be 37% desktop PCs to 63% laptop PCs.

• Western EU and North America are the largest PC markets on a revenue and unit basis. The smallest markets are Africa, the Middle East and Japan.

• South American consumers will increase their allocation of CE purchases to PCs by the largest amount. Japan will decrease their allocation the most.

• Lower priced netbooks will pull the average price of PCs down, resulting in lower overall revenue growth.





PC Up Up Down Down Up Up Down Up Down

Digital Imaging Up Down Down Down Up Down Down Down Up

Game Consoles Up Flat Down Flat Up Flat Down Down Up

Monitors Down Flat Down Down Down Flat Flat Down Flat

MP3/4 Players Down Down Up Down Up Down Down Down Up

DVD Up Down Up Down Down Down Down Down Up

Printers Down Down Down Down Down Down Down Up Down

GPS Up Up Down Up Up Flat Up Up Up

Other Flat Flat Flat Flat Flat Flat Flat Flat Flat


2009 – Blu-ray Finds Its Calling

• Blu-ray DVD sales take-off in 2009: unit sales and revenue expected to nearly double. The North American market will account for the largest percentage of sales, followed by Western EU and Japan.

• Globally, Blu-ray unit sales will account for about 10% of the total. In the U.S. market, Blu-ray DVD revenues will exceed standard DVD revenues in 2009.

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009

High Definition DVD Player

DVD Recorder

DVD Player

Global Unit Sales of DVD Players

Millions of units

Concentrated Video Game Market

• The game console market is expected to grow 5.4% in units and 1.1% in revenue in 2009.

• Gaming software side of business larger than hardware. Don’t forget the gaming accessories – revenue grew 22% in the U.S. market in 2008.

• North America, Western EU and Asia (less China) will increase allocation of CE expenditure towards video game consoles.

0

20

40

60

80

100

120

2005 2006 2007 2008 2009

North America

Western EU

Japan

South America

Asia

China

Everybody else

Global Unit Sales of Game Consoles

Millions of units

Portable Navigation Market Explodes

• Unit sales of portable navigation grew 55% in 2008 and is expected to grow another 22% in 2009.

• Intense price competition dampens revenue growth.

• Market dominated by Western EU and North America. High vehicle ownership rates drive GPS purchases.

• Nearly every region expects to increase their allocation of CE expenditures to navigation, with largest increases coming from North America, Western EU and Eastern EU.

0

10

20

30

40

50

60

2005 2006 2007 2008 2009

Western EU

North America

Eastern EU

Asia (less China)

South America

Everybody else

Millions of units

Global Unit Sales of Portable Navigation

Other Factors That Have and Will Impact Global CE Sales

Trends to Watch• Demographics

• Aging countries (EU, Japan) vs. emerging markets (BRIC countries with high concentrations of young people.

• Population shift to urban areas.

• Growth of automobile ownership.

• Strong awareness of tech brands

• 40% of top 25 global brands are tech related (source: Interbrand).

• Growth of the Internet

• Embedded Internet, source of everything: music, video, location, information, communication, productivity.

• Changing retail dynamics

• Retail consolidation

• Information arms race shifts balance of power: consumers and retailers win?

• Greening of CE

Interbrand 2008 Best Global Brands Rankings

2008 Rank 2007 Rank Brand Sector1 1 Coca Cola Beverages

2 3 IBM Computer Services

3 2 Microsoft Computer Software

4 4 GE Diversified

5 5 Nokia Consumer Electronics

6 6 Toyota Automotive

7 7 Intel Computer Hardware

8 8 McDonalds Restaurants

9 9 Disney Media

10 20 Google Internet Services

11 10 Mercedes-Benz Automotive

12 12 HP Computer Hardware

13 13 BMW Automotive

14 16 Gillette Personal Care

15 15 American Express Financial Services

16 17 Louis Vutton Luxury

17 18 Cisco Computer Services

18 14 Marlboro Tobacco

19 11 Citi Financial Services

20 19 Honda Automotive

21 21 Samsung Consumer Electronics

22 New H&M Apparel

23 27 Oracle Computer Software

24 33 Apple Computer Hardware

25 25 Sony Consumer Electronics

40% of top 25 global brands are in the tech sector

Summary Points

• Strong CE growth in 2008, slowing in 2009, but will still outperform most other sectors.

• Economic slowdown, pricing pressures, maturing markets impact revenue growth.

• Approximately 2.5 billion units of CE products will sell in 2009.

• Add in the CE accessories category and the aggregate is substantially larger.

• Increasingly large installed base in the important categories of PC, TV, and video game. Content and services vital to CE business.

• BRIC countries will continue to be a driver of global CE sales.

• The regions of Eastern EU and South America will perform especially well. China and India will slow down.

• Mobile phone growth slows, but the macro trend of work, play and communicate anywhere, anytime will continue to drive innovation and CE sales.

• Laptop PCs, portable navigation, portable gaming and portable MP3 / digital media players continue to generate strong sales.

Thank You

Tim Herbert

Senior Director, Research

Consumer Electronics Association

[email protected]

mailto:[email protected]

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