Low pricing keeps CE growth in check

El Segundo, Calif. — Although the global consumer electronics market returned to sequential revenue growth in the second quarter, the industry this year will not achieve an annual expansion that would signal a true recovery, according to iSuppli Corp.

Global consumer-electronics equipment revenue rose to $71.1 billion in the second quarter, up 4.2 percent from $68.3 billion in the first quarter, based on a preliminary estimate from iSuppli. This represents a major improvement from the first quarter, when revenue fell by 25.8 percent compared to the fourth quarter of 2008, said the researcher.

While consumer-electronics revenue typically declines on a sequential basis in the first quarter following the fourth-quarter holiday selling season, this represented a particularly sharp decline, said iSuppli.

“Following the dismal first quarter, conditions are starting to improve in the consumer electronics business,” said Sheri Greenspan, senior analyst, consumer electronics, for iSuppli, in a statement. “Revenue will continue increasing on a sequential basis in the third and fourth quarters, rising by 12.5 percent and 10.2 percent. While this growth is encouraging, 2009 will still be a down year for the industry.”


iSuppli predicts global consumer electronics equipment revenue will decline to $307.6 billion in 2009, down 8.2 percent from $335.2 billion in 2008, due to the impact of the worldwide economic downturn as well as sharply declining prices for key products.

As the economy continues to recover, iSuppli expects the overall consumer electronics product revenue in 2010 to increase 2 percent to reach $313.7 billion.

According to the new report, Some Consumer Electronics Segments Doing Better Than Expected, the global economic downturn in combination with declining prices for key products led to a revenue decline of 10 percent in the first quarter compared to the same period in 2008 and by 11.3 percent in the second quarter. iSuppli projects that revenue will decline by 8 percent and 4.2 percent in the third and fourth quarters, respectively, on an annual basis.

However, thanks to lower pricing for popular consumer electronic devices including digital cameras, video game consoles and LCD TVs, aggregate consumer electronics product unit shipments are set to rise sequentially by 5 percent, 16.1 percent and 14.1 percent in the second, third and fourth quarters, reported iSuppli.

Following a 29.9 percent plunge in the first quarter, these sequential increases won’t be enough to prevent a 4.8 percent decline for all of 2009, said the researcher.

Although all 19 consumer electronics product segments tracked by iSuppli experienced a sequential decline in unit shipments in the seasonally weak first quarter, the second quarter saw a rebound, with most products returning to growth. The only products to see a decline in unit shipments in the second quarter were handheld video games, video game consoles, camcorders and the rear-projection televisions.

In the third quarter, the only major segments set to experience sequential unit shipment declines will be digital set-top boxes and rear-projection televisions.