CE Industry Headed For Record Sales Despite Gloomy Economy, CEA Says

Sales of digital TVs are expected to fall in 2011 to about $18 billion, according to CEA’s semi-annual industry forecast released Monday. With 88 percent of U.S. households owning at least one DTV set, penetration is high for the mature TV category, but it “remains an important contributor to the industry’s bottom line,” CEA said. Connected TVs are a growth sub-segment in the category, though, and 10.4 million network-enabled displays are slated to ship to dealers this year. 3D displays will also see better-than-projected growth as 3D becomes a standard feature in displays and is incorporated into more sets, CEA said. An estimated 3.6 million 3D TVs will ship in 2011, up from a January projection of 1.9 million units, it said.

After lowering CE shipment projections each month since the beginning of the year, CEA projected higher growth for 2011 than previously estimated. The industry is projected to surpass $190 billion in overall shipment revenues this year, posting a growth rate of 5.6 percent compared with a January forecast of 3.5 percent, CEA said. Growth is projected to continue into 2012, when shipment revenue will reach an all-time-high $197 billion, CEA said.

The shift in tone is a contrast to sentiment expressed at CEA Line Shows last month when Shawn Dubravac, director of research at CEA, said that with momentum having slowed in the economy, “it’s hard not to feel a bit pessimistic” through the first six months of the year (CED June 23 p1). CEA had continued to lower forecasts each month as sales slowed, and Dubravac observed, “The consumer is certainly weaker today than he was six months ago."

Surging sales of mobile connected devices are pushing the revised forecasts, CEA said, with tablet shipments projected to grow 157 percent in 2011 to 26.5 million units representing $14 billion in revenue. Smartphone sales will continue to be the primary revenue driver for the industry, with unit sales climbing 45 percent to $23 billion in revenue, CEA said. Sales of e-readers will double in 2011, with 16.5 million units shipping for a total of $1.8 billion in revenue, CEA said. “The revenue boost from these innovative products is undeniable as a number of other CE segments are reaching maturity and sales are naturally declining,” said Steve Koenig, CEA director of industry analysis.

Despite slower TV sales, consumers are continuing to upgrade their video-based audio systems, according to the report. Audio sales are rebounding this year, led by soundbars, which are expected to jump 250 percent in sales to 2.4 million units, it said. In-vehicle technology is expected to see double-digit growth as consumers continue to integrate existing devices and content into their vehicles, including Internet radio and automotive entertainment technology whose revenues are up more than 5 percent. And despite recent negative sentiment regarding digital cameras as smartphone cameras have become more advanced, digital cameras will see 3 percent growth in shipments this year, CEA said.