CES 2014 Tech Market Update: Here Comes China

CEA’s Director of Industry Analysis, Steve Koenig, led a press event on the state of consumer electronics titled “Around The World In 60 Minutes: Global Technology Market Update.” Heavy emphasis was placed on the rise of China and how the phrase “developing markets” is now a misnomer when used to describe the Asian market–  with $282 bn spent on consumer technology in China in 2013, it now outpaces North America. “Has North America’s share peaked?” he asked the audience rhetorically. “Yes it has.”

Currently growth in China is driven by urban centers, but Koenig points out that the country still has vast, untapped rural markets that will likely follow suit.  He was quick to point out that while Us and Chinese consumers are largely excited about the same range of products, consumer sentiment studies indicate the Chinese population is significantly more enthusiastic about spending its hard earned dollars on electronics.

Overall 2014 is projected to post a 1% decrease in overall spending on consumer electronics.  While smartphone and tablet purchases are likely to stay strong, spend will slow as unit growth shifts to low-end products aimed at volume penetration in emerging markets.

Lower-priced tablets also means smaller screen sizes– in fact, 66% of US tablet shipments in 2014 are projected to be less than 9”. That said, when it comes to TVs, the global community seems to rally around a “bigger is better” philosophy as average screen sizes continue to grow. Koening posits that global TV sales are returning to slow growth, driven in part for a desire for bigger screens and SmartTV functionality.  Ultra HD sales will increase significantly as well in 2014, but he cautions against great expectations quite yet.

Koenig ended on a positive note, mentioning that the next big home electronics boom may be on the horizon with technologies like 3D printing and wearable computing. That said, he was quick to point out that 2014 won’t be a year when those segments find popularity on the level of tablets and smartphones.