Despite the epidemic in 2020, the performance of the consumer electronics market is not very bad.
The consumer electronics market is expected to exceed USD 1 trillion in 2020, and the compound annual growth rate between 2020 and 2026 is estimated to exceed 7%. Industry participants’ continued investment in research and development for the development of new consumer Electronic products, including smart phones, smart wearable devices and home appliances, will be the dominant force driving market growth.
The Internet has spread rapidly in developed and developing economies around the world, providing strong growth opportunities for the consumer electronics market. According to market data from the China Internet Network Information Center, the Internet penetration rate reached 61.2% in 2019, an increase of 1.6% over 2018. The CIA reported that as of 2020, there are 62.9 million active Internet users in the UK.
Especially in the 5G commercial era, the acceleration of consumer electronics technology innovation and product iteration will be an obvious trend. Which consumer electronics will have opportunities in the future, and which may face disadvantages?
MicroLED or speed up
It is expected that in the next few years, the industry trend of applying MicroLED technology to TVs and large displays will expand the market scale of audio and video consumer electronics products. Leading market participants are investing heavily in the development of this technology to meet high consumer demand. For example, in January 2020, LG and Samsung announced their plans to launch MicroLED TVs for residential and commercial applications. Compared with conventional LEDs, the technology’s ability to provide high contrast and brightness is expected to increase its market share.
Consumer electronics products are expected to resume growth in 2021
Since January 2020, the rapid spread of the global epidemic has adversely affected the consumer electronics field. Supply chain and logistics disruptions, trade restrictions, and severe shortages of raw materials have hindered the production capacity of consumer electronics manufacturers. Companies including Samsung, Apple and LG have suspended production in many countries including India, Malaysia and China to comply with government regulations and curb the spread of the virus. According to industry forecasts, the market is expected to resume its growth momentum in the first quarter of 2021.
Voice assistants affect the development of the consumer electronics industry
Due to the integration of advanced features such as support for voice assistant control and enhanced connectivity, the audio and video consumer electronics market will account for more than 70% of the market share in 2020. The proliferation of voice assistants in the residential and commercial sectors is affecting the market. Voice assistants (such as Alexa, Siri, and Google Home) enable consumers to monitor and control devices through simple voice commands. The integration of voice assistants with personal consumer electronics (such as speakers and headphones) will bring positive prospects.
Further expansion of the personal application market
In 2020, the personal application market will exceed 25 billion U.S. dollars and is expected to grow by more than 7% by 2026. This increase can be attributed to the increase in disposable income and consumer spending power. The falling prices of personal consumer electronics products such as smart phones, Bluetooth speakers, earphones and wearable devices have also contributed to the continuous growth of market demand for these devices.
By 2026, Asia-Pacific consumer electronics market revenue is expected to reach 650 billion US dollars, growing at a compound annual growth rate of 8% during the forecast period. The rapid urbanization process and population growth in the region are driving the adoption of consumer electronics by middle- and high-income households.
The launch of low-cost consumer electronic products (such as smartphones and TVs) from multiple local brands is supporting their expansion in low-income groups. Among young people, their acceptance of new technologies is higher, which will further increase market demand.
The increase in demand encourages market leaders to launch new products in the field of household consumer electronics. For example, Panasonic announced in February 2020 its plan to launch several new networked household appliances for the Japanese and Indian markets. New consumer electronics products in the enhanced product portfolio include smart LED and OLED TVs, kitchen appliances, and personal care consumer electronics.
Industry acquisition or acceleration
Companies in the consumer electronics industry are focusing on acquiring other companies operating in the ecosystem. Acquisitions help market participants play a role, expand their customer base and significantly increase their market share. For example, in September 2019, Logitech International announced its plan to acquire San Francisco-based Streamlabs, Inc. . This acquisition helped the company strengthen its software and technical expertise to produce innovative products.
Other important strategies adopted by market participants include product innovation, new product launches, and business expansion in the new region. For example, in 2020, Apple opened retail stores in six new locations in Japan, Singapore, Mexico and Taiwan. These authorized distributors can help Apple increase market revenue from these locations.