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Worldwide sales of gadgets to slow: report

Publication Date : 15-04-2014

 

The global sales of smartphones, tablets, personal computers and video game consoles are expected to slow down starting this year as consumers are less eager to snatch up new products, according to a recent report published by Deloitte.

This year, the worldwide sales of these five items are expected to reach US$750 billion, stalling at around $800 billion for the next five years.

This compares with the dramatic double-digit growth of the past decade, the report said.

By sector, the smartphone market is expected to rise to $375 billion, up 12 per cent from 2013. However, sales in 2018 are only expected to rise to $430 billion, a 15 per cent increase over four years.

The report mostly attributed the slowdown to the handset upgrade cycle, indicating how long consumers hold onto their phones before upgrading to new devices.

The cycle lengthened by over 25 per cent from 19 months in 2007 to 24 months in 2013.

“The average consumer is happy with their current phone for longer than in 2008 and 2009, when each new model was a dramatic improvement over the previous model,” Deloitte said.

Further, smartphones will be mainly sold in developing countries for the next five years where many of the buyers are price-sensitive, dragging down the average sales prices of smartphones.

The sales of low-end tablets are also expected to contribute to the lower average sales prices.

Tablet sales are expected to reach 285 million units and surpass $100 billion in 2014, but annual tablet sales are likely to remain near the $100 billion level through 2018.

The markets for PCs and TVs are expected to shrink, the report said. PC sales declined by 12 per cent to below $200 billion in 2013, and it will see an additional decline by 4 per cent in 2014.

The market for TV sets has also been sliding since peaking at more than $115 billion in 2011.

“3-D technology, integrated connectivity, and voice and gesture control have not enticed consumers to upgrade their TV sets more frequently or at a higher price,” Deloitte said.

The report did, however, suggest that the arrival of ultrahigh-definition televisions may offset the downturn.

“That erosion might slow or even be reversed over the next five years by demand for ultrahigh-definition TV sets, which are likely to command premium prices,” the report said.

Meanwhile, sales of video game consoles were forecast to slow down to $10 billion growth per year, but Deloitte said the results were unlikely to make much of a difference on the consumer electronics industry.

 

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