Consumer electronics have been increasingly successful at least until 2015, which will be slow, according to a prediction by the Consumer Electronics Association. Amidst turbulent economic conditions and decreasing prices of mobile devices, the outlook for global consumer tech spending is uncertain.
Global spending on technology products will see a modest increase of just 1 percent this year, reaching $1.02 trillion, the trade group behind the long-anticipated Consumer Electronics Show predicted on Sunday. The 2015 International CES, the world’s largest showcase for the hottest in consumer electronics, runs from January 6 to January 9 in Las Vegas and promises a lot of excitement and spectacle. Days before its official launch, analyst Steve Koenig of the Consumer Electronics Association said at a press conference that any forecast for 2015 would be uncertain due to the nearly flat growth in 2014.
Despite the strong demand for products such as tablets and smartphones in emerging markets, there will be a slowdown in North America, the Eurozone and Japan. In fact, while healthy growth is expected in some developing economies such as China, predictions for Brazil are gloomy. Chinese and Asian consumers are increasingly buying smartphones and tablets, while the upgrade to ultra high-definition displays is driving the demand for new televisions. India is also a growing market for mobile devices, but the other BRIC economies – Brazil and Russia will see slower tech spending, according to the CEA. Economic sanctions imposed on Russia in the recent months are expected to affect both economic growth and demand.
Data from CEA and research firm GfK reveals that sales grew just 1 percent last year after falling by 1 percent in 2013, still unable to reach pre-recession levels. In 2014, consumers spent $373.9 billion on smartphones globally, which is an increase of 13 percent over the previous year. In 2015, however, the sales are predicted to grow by only 9 percent to $406 billion. This is a significant slowdown, compared to the previous three years, when smartphone sales grew by 30 percent annually.
The association predicts tepid spending in many regions, including North America due to modest economic growth, Europe and Japan due to stagnation, along with the big economies of Brazil and Russia. But the turbulent economic conditions are just one side of the coin – the decreasing price of new mobile devices is affecting total spending. Smartphone unit sales will jump by 19 percent to 1.5 billion units in 2015, yet revenue will grow only 9 percent as prices fall. This is mostly influenced by the demand of low-cost devices in emerging markets and the prominence of budget phone makers such as China’s Xiaomi, which is the best global performer, doubling its revenue in 2014. The manufacturer, which sells its models mainly in China, India and other developing countries has become the world’s third largest smartphone maker behind Samsung and Apple.
