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Smartphone, tablet factory revenue to hit $354.3B in 2013

Posted: 30 Oct 2013 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone? tablets? manufacturing? LCD TV?

According to the most recent data from IHS, the global factory revenue for smartphones and tablets this year will rise to become larger than revenue for the entire consumer electronics (CE) market for the first time in the history of the industry. Worldwide OEM factory revenue for media and tablets and for 3G/4G cell phonesa category dominated by smartphoneswill amount to $354.3 billion in 2013, stated the market analytics company.

The revenue will be three per cent more than the $344.4 billion for OEM factory revenue for the CE market, a broad category that includes hundreds of product types such as TVs, audio equipment, cameras and camcorders, video game consoles and home appliances. The massive CE market historically has dwarfed the tablet and smartphone segment, with CE 30 per cent larger just last year.

Factory revenue is defined as the total OEM dollar value of all branded devices or equipment in a market. In 2007, smartphone shipments surged due to Apple's introduction of the first iPhone. In 2010, there was also a notable increase in revenue, the year that Apple kicked off the media tablet market with the introduction of the initial model of the iPad.

Smartphone, tablet factory revenue to hit $354.3B in 2013

"Consumer demand for smartphones and tablets has been flourishing in the past few years while sales growth for CE products has languished in the doldrums," said Randy Lawson, senior principal analyst for semiconductors at IHS. "The fact that these two product categories are on their own able to generate more OEM factory revenue than the entire CE market illustrates the overwhelming popularity of smartphones and tablets. Meanwhile, the CE market has gone flat, with many of the major product types experiencing either low growth or declines in revenue during the past six years."

"Consumers simply are finding more value in the versatility and usefulness of smartphones and tablets, which now serve as the go-to devices for everything from phone calls, to photography, to navigation, to media playback, to fitness tracking. Because of this, smart mobile platforms are displacing sales of CE products such as digital still cameras, camcorders, GPS and media players."

The rise of the smartphone and tablet markets has been remarkable, with OEM factory revenue expanding by a factor of nearly nine to $354.3 billion in 2013, up from $41.2 billion in 2007. Revenue this year will rise by a robust 31 per cent.

However, the fast pace of growth is slowing, with revenue in 2014 increasing by only 18 per cent to reach $418.6 billion. And with CE factory revenue declining in 2014, smartphones and tablets will expand their revenue lead dramatically, rising to a 22.2 per cent advantage compared to the entire consumer electronics market. This gap will continue to widen and will reach nearly 35 per cent in 2017.

In contrast, consumer electronics OEM factory revenue has been flat during the past few years, growing by slightly less than one per cent from 2007-2013.

Of the 20 distinct CE product segments tracked by IHS, 14 will suffer a decline in their CAGR from 2007-2013. Some large product segments such as LCD TVs are seeing growth in their revenue during that period. Even so, the CAGR for LCD TVs will be less than 10 per cent, representing a major slowdown from the 83 per cent rise seen during the previous six-year period from 2001-2007the era of the global flat-panel TV replacement wave.

With LCD TV revenue starting to decline in 2014, the overall CE market is set for a long-term contraction as well. By the end of 2017, CE OEM factory revenue will slide to $327 billion, down five per cent from the total in 2013.

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