NPD: Consumer Technology Spending Falling19 Feb, 2013 By: Erik Gruenwedel
Lone bright spots, smartphones and tablets, see slower sales growth in 2012
The U.S. consumer technology industry saw a 2% decline in sales to $143 billion — double the 1% decline in 2011, according to new data from The NPD Group. Since 2010, consumer technology sales have declined by $4 billion.
Notebooks, flat-panel TVs, smartphones, tablets and desktop computers accounted for 53% of sales in 2012, up from 49% in 2011. Tablets and smartphones were the only two of the top-five categories to post growth, and accounted for all the increase in revenue share among the top categories.
“While sales fell in consumer technology for the second consecutive year, there was an uptick in Q4 which is cause for optimism,” Stephen Baker, VP of industry analysis at NPD, said in a statement. “After struggles with declining categories, and increasingly saturated markets over the last few years, fourth quarter’s results may be the first sign that even as a mature industry consumer technology can grow again, albeit with a very different dynamic than in previous growth spurts.”
Indeed, tablet sales revenue grew 42%, which was down from 135% revenue growth in 2011. Smartphone sales grew 25%, down 3% from 2011.
Meanwhile, sales of desktop and notebook computers fell 11% and 9%, respectively, while sales of TVs declined 7%. Desktop computer sales increased 9% in 2011, while notebook and TV sales declined 2% and 5%, respectively.
The rate of revenue decline for PC products accelerated year-over-year as tablet sales started to erode the computer marketplace. TVs remained mired in a cycle of declining prices and weak volume as the strong momentum from the very large screen market was unable to offset stagnant demand.
“While CE remains a dynamic industry, the fact is that the stellar growth of the past few years has made growth today more difficult,” Baker said. “Most market segments have high penetration rates and the demand for additional devices is slowing, or declining. Tablets and smartphones have been able to stimulate demand for additional devices, but unfortunately it hasn’t been enough, yet, to sustain positive growth trends.”