If you missed CE Week in New York a couple of weeks
ago (and judging by the turnout compared to, say, Black Friday at Walmart, most
of you did), you missed a lot. I don't mean to sound like a commercial, but
this mid-year CE Week confab, while not exactly a substitute for the late lamented
Chicago Summer CES (damn, I miss that show), have proven to be entertaining
(except for the 90-degree heat) and informative (at least for us on the
analyst, market research and Amazing Kreskin forecasting merry-go-round), if
not a little depressing (through no fault of the organizers).
But enough
parenthetical asides (at least for this graf). For me, the highlights of CE
Week are the Shawn-and-Steve presentations – state-of-the-US-industry reports
from CEA's in-house analysts Shawn Dubravac and Steve Koenig. Combined with the new parallel photo
industry session from PMA's 6Sight analysts, I got a
great deal of detail and insight into the near-future of the gadget world.
Since you weren't
there (and you know who you weren't), allow me to succinctly transmit the bad
news:
The US CE business
sucks.
Shawn's presentation
was ominously entitled "Mid-Year Update: A Meltdown in the Second
Half?" Oh, an optimist!
Three of Shawn's sunnier
summations:
•
Nominal
spending up nearly eight percent in 2011. Will be difficult to match in 2012
•
Tablets
and smartphones primary growth drivers (nominal spending down three percent
without both categories)
•
In
the face of a volatile economic landscape – inventories remain lean
More specifically, total
video unit sales – TVs, DVD and Blu-ray players – are down (albeit not as
catastrophically as last year) 13.7 percent and revenue is down 7.6 percent in
the first half after sinking 14 percent in each category in 2011. I guess these
numbers can be spun as an improvement.
Flat panel HDTV unit
sales are down 2.3 percent, revenue 2.9 percent – even though ASP has risen
from $515 last year to $536 so far this year. Plasma HDTV unit sales are
sinking faster than the Titanic, down 30 percent so far this year. The only TV
growth area seems to be in sets 50 inches or larger. Sales of all other sizes
continue to drop.
Suffering an even
more precipitous collapse are digital camera sales, down a whopping 31 percent
in the first half of 2012 compared to last.
According to Shawn,
the smartphone camera shoe has finally dropped (pun intended). Consumers no
longer feel the need to buy or schlep a cheap digital camera when they already
have a perfectly serviceable (i.e. the dreaded "good enough") 5 or 8
MP camera in their smartphone. Just how sales of the new higher-priced mirrorless
compact system cameras might stall this slide remains to be seen. CSC camera
sales may stabilize revenue and profit margin, but as smartphones camera
capabilities continue to improve it's doubtful digital camera unit sales will
ever grow again.
Audio sales may
actually have recovered a bit – down 26.1 percent in 2011 but down merely 6.6
percent so far this year. But revenue has dropped, down 16 percent last year
but down 18 percent in 2012. Perhaps the biggest anchor on audio sales are falling
MP3 sales, down 20 percent – again, smartphones being the culprit.
Where's the growth?
C'mon, you know – all together now:
Smartphones and
tablets.
According to Shawn,
smartphones sales are growing 22 percent and will zoom 120 percent-plus this year.
Tablets unit sales are set to hit 120 million units in 2012 – Apple alone is
expected to sell 20 million this quarter alone – after reaching 17 million units
in 2010 and tripling to 55 million in 2011.
This fall promises to
be rather fecund for smartphones and tablets. Amazon is expected to announce
more advanced as well as less expensive Kindle Fires, and also is rumored to be readying its own Android smartphone. Microsoft will
hopefully finally release Windows 8 OS versions for the desktop, smartphone and
its new Surface tablets. On the heels of its successful launch of its Galaxy S
III smartphone this summer, Samsung will supposedly spring a 5.5-inch Galaxy Note II on us – because
apparently a 5.3-inch screen isn't quite big enough.
And amidst its usual
ballyhoo, Apple will announce the iPhone 5 and, if the rumors are true, an iPad Mini.
What about an Apple
HDTV to help bolster sagging TV sales? Not likely in 2012 IMHO. I'll explore
why I think Apple is holding its HDTV in this space two weeks hence.
And hopefully Shawn
will have better news in Las Vegas in six months.
