Boston, MA -- (ReleaseWire) -- 06/25/2013 -- We project that US consumer electronics spending will grow by about 5% in US dollar terms in 2013, with growth areas including large-size HD TV sets, smartphones, Windows 8 tablets, ultrabooks, and smart TV sets, but questions remain about the sustainability of consumption in the absence of strong wage growth.
Flat-screen TV set sales grew strongly in January 2013, ahead of the Super Bowl, with large screen sizes in particularly demand. Meanwhile, surveys indicate increasing smartphone ownership among lower-means households, with annual incomes of US$35,000 or below. Surveys suggest returning consumer confidence, but vendors will largely rely on product innovation such as smart TV sets to drive growth. Falling average prices in many product categories will place revenue and margins under pressure.
Headline Expenditure Projections
Computer hardware sales: US$149bn in 2012 to US$154bn in 2013, +3.4% in US dollar terms. Forecast in US dollar terms unchanged but Windows 8 based tablets and notebooks could provide growth areas in 2013.
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AV sales: US$70bn in 2012 to US$75bn in 2013, +7% in US dollar terms. Forecast in US dollar terms unchanged because despite falling average prices in H212. There is evidence that U.S. consumers are willing to pay more for features such as 3D and large-screens.
Handset sales: US$32bn in 2012 to US$35bn in 2013, +7% in US dollar terms. Forecast in US dollar terms unchanged, with Samsung's Galaxy S4 expected to lead a fightback for Android phones following a strong performance by Apple in H212.
Risk/Reward Rating: The US's score was an unchanged 77.2 out of 100.0, giving it first place in our latest Americas CE RRR table. The country ranked first in its region for all component scores including Market, Country Structure, and Country and Market Risk. Despite its current economic challenges, BMI expects the US to retain its significance as the world's largest and most influential consumer electronics market.
Key Trends & Developments
- The average price of a flat-screen TV set in the US market dropped sharply in H212, due to increased competition, as vendors and retailers rolled out price promotions. Mature markets in many AV segments mean growth will rely to a large extent on new technologies and features to drive sales of smartphones, as well as LED, internet-enabled and 3D TV sets.
- US PC sales were forecast to report single-digit growth in 2012, after a further annualised contraction in Q212. In 2012, sales of ultrabooks fell far short of Intel's forecast that ultrabooks would comprise 40% of US notebook sales by the end of the year. Migrations to Windows 8-based devices could provide an impetus to PC upgrades in 2013, although sales of notebooks will be constrained by the growing preference for alternative connectivity devices such as tablets and smartphones.
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