ces 2017 exploring the global consumer tech industry

Exploring the Global Consumer Tech Industry

Steve KoenigSenior Director, Market Research@KoenigSteve

Go here for slides: CTA.tech/salesandforecasts

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Retail CE sales tracking at more than 340,000 retail stores in 80 countries.

U.S. sell-in (shipments) data for dozens of CE categories on a monthly basis.

+ = Global Consumer Technology Spending Forecasts

Consumer Electronics ● Audio and Video Accessory ○ Headphone ○ Universal Remote Control ○ Docking Speakers ◦ Bluetooth Pairing Speakers only ◦ Docking Speakers Excl. Bluetooth Pairing only ● Auto Multimedia ○ Car Entertainment ◦ Car Audio ◦ Car Speaker ◦ Car Vision ◦ Fixed Car Navigation ○ Portable Car Navigation ● Home Audio ○ Audio Home System ◦ Home Theatre System ◦ Music System ○ Hi-Fi Single Element ○ Loud Speaker ◦ Hi-Fi Loudspeaker ◦ Soundbar Speaker

Product Categories

● Home Video ○ Home DVD Player and Recorder ◦ Home DVD Player ◦ Home DVD Recorder ○ Home HD DVD+ Blu Ray ● Personal Audio ○ Portable Media Player ○ Radio Devices ◦ Clock Radio ◦ Portable Radio ◦ Radio Boombox ● E-Reader ● Recording Media ○ Memory Card ○ Other Recording Media ◦ CD R ◦ DVD R ○ USB Memory

Consumer Electronics ● TV ○ LCD TV ◦ 3D LCD/LED TV ◦ LED TV ◦ Smart LCD/LED TV ○ CRT TV ○ Plasma TV ◦ 3D Plasma TV ◦ Smart Plasma TV ● TV Set-Top Box ● Videogame Console

Product CategoriesIT ● Monitor ● Other PC Peripherals ○ External HDD ○ Keying Device (Keyboard) ○ PC Speaker ○ Pointing Device (Mouse) ● PC ○ Desk PC ◦ All-in-One PC ◦ Desk PC (ex AIO) ○ Mobile PC ◦ Netbook PC ◦ Notebook PC ◦ Computing Tablet ○ Media Tablet ● Printing ○ Printer ○ Printer Cartridge

Photo ● Digital Camcorder ○ Action Camera ○ Digital Camcorder ex-Action Camera ● Digital Still Photography ○ Digital Still Camera ◦ Compact Camera ◦ Compact System Camera (Mirrorless) ◦ DSLR Camera ○ Interchangeable Lens

Product Categories

Telecom ● Mobile Handsets ○ Mobile Phone ○ SmartPhone ● Other Telecom ○ Headset ◦ Headset ex-Mobile Stereo ◦ Mobile Stereo Headset ○ Line Phone ◦ Fixed Line Phone ◦ Mobile Line Phone ● Wearables

○ Health & Fitness Tracker ○ Smart Eyewear ○ Smartwatch ○ Wrist Sport Computer ○ Locator ○ Connected Watch ○ Hearables

Analysis Considerations: Geographical, Financial

• North America• Western Europe• Developed APAC

• Exchange Rates (FX)• Sales Tax• Tech Subsidies

• Central /Eastern Europe

• Latin America

• Emerging APAC

• Middle East/ Africa

Developed Emerging

0.81 0.96 6.94 118.50 1.34

2016: The Year of the Unexpected

Global Economic Picture

2012 2013 2014 2015 2016Fcst 2017Fcst

6% 6% 5% 4% 4% 4%

13% 12% 11% 11% 12% 12%

17% 18% 19% 21% 22% 22%

8% 8% 8% 7% 7% 7%8% 8% 8% 8% 7% 7%

24% 24% 25% 27% 27% 27%

23% 23% 24% 22% 22% 21%

GDP* distribution by Region - USD

C&E Europe/CIS Developed Asia Emerging Asia Latin America Middle East & Africa North America Western Europe

* Source: IMF, OCT 2016

World GDP

2016 = 3.1%

2017 = 3.4%

2017 Global Economy: Realignments, Long-Term Trends, New Shocks

• Uncertainty underscores outlook• Brexit, trade risks and Trump• Some firming of commodities pricing• Sentiment toward emerging markets improving – Asia looking

strong • Advanced economies wrestle with new political landscape

– USA, UK, Korea, Brazil• China: consumer spending strong, capital spending weak

Technology’s Magnificent Seven

2015 = 79%761 billion USD


Share:Total:Global

Source: GfK/CTA Digital World

Technology’s (New) Magnificent Seven


Share:Total:Global

Mobility Makes the World Go Round

2012 2013 2014 2015 2016fcst 2017fcst

25% 23% 23% 21% 19% 18%

38% 35% 34% 31% 29% 29%

4%4% 3%

3%2% 2%

33% 38% 40% 46% 50% 51%

Global Digital World Values (USD) share by Category

Smartphones47%

Smartphones: Super Massive

2012 2013 2014 2015 2016fcst 2017fcst0

50

100

150

200

250

300

350

400

450

-10%

-5%

0%

5%

10%

15%

20%

25%

61 38 24 14 11 9

260352 379 401 431 432

17%

21%

3% 3%6%

0%

Global Mobile Values (USD bn)

390 402 416442 441

321

Smartphones

StandardPhones

Global Handset Volumes Steady(Units in Millions)

2012 2013 2014 2015 2016fcst 2017fcst0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

-10%

-5%

0%

5%

10%

15%

20%

25%

920735 594 476 421 370

673 1,004 1,231 1,320 1,399 1,4448% 9%

5%

-2%1% 0%

Mobile Phone SmartPhone y/y Mobile

1,742 1,825 1,796 1,819 1,8141,597

Smartphones Value Share by Region (USD)

Latin Amer-ica7%C&E Eu-rope/CIS

4%

North Amer-ica

18%

Emerging Asia39%

Middle East & Africa

10%

Western Europe12%

Developed Asia10%

Developed40%

Emerging60%

2011 2012 2013 2014 2015 2016 2017

Think Globally, Connect ‘Mobilly’

Global Tech Device Sales Revenue

51%

Other Device Categories

Smartphones and Tablets

63%

2017 Tech Spending

586 Billion USDSmartphonesTabletsMobile PCs

Source: GfK/CTA Digital World

22%

44%

Global Tablet Volumes Trending Lower (Units in Millions)

2012 2013 2014 2015 2016fcst 2017fcst

125

196223

185150 136

Have Global PC Volumes Crested?(Units in Millions)

2012 2013 2014 2015 2016fcst 2017fcst0

100

200

300

400

500

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

127 114 109 96 87 81

196 184 183 173 167 163

125 196 223185

150 136

12%10%

4%

-12% -11%

-6%

493 515454

404 380449

0

50

100

150

200

250

-19

-14

-9%

-4%

1%

6%

Media Tablet

Mobile PC

Desk PC

y/y PC

Tablet Declines Impact Global PC Revenues(Revenues in Billions USD)

2012 2013 2014 2015 2016fcst 2017fcst0

50

100

150

200

250

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

81 72 69 59 53 50

143 134 132115 114 111

58 68 67

48 38 34

1%-3% -2%

-18%

-7% -5%

273 268

221205 195

282

0

50

100

150

200

250

-19

-14

-9%

-4%

1%

6%

Media Tablet

Mobile PC

Desk PC

y/y PC

Developed Regions Dominate Mobile PC Sales

2010 2011 2012 2013 2014 2015 2016 2017

778

749

731

726

723

664

684

679

Latin America3%

C&E Europe/CIS

4%

North America32%

Emerging Asia19%

Middle East & Africa10%

Western Europe20%

Developed Asia11%

Mobile PC Values share by Region (USD) Developed

63%Emerging

37%

Avg. Selling Price (USD)

Global TV Volumes Leveling Off(Units in Millions)

2012 2013 2014 2015 2016fcst 2017fcst0

50

100

150

200

250

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

210 220 235 230 225 227

20 11613 10 8

-8%

0%3%

-5%-3%

1%

242 249 235 228 229243

3 OLED

Plasma

CRT

LCD

y/y TV

Smaller Screens = Bigger Viewing Profile

2012

2016

62%

51%

16%

21%

5%

12%

14%

8%

3%

7%

1%

2%

Television Smartphone Laptop Desktop Tablet Other

Source: The Evolving Video Landscape (2012)Source: 2016 Video Study

USA: Average Share of Video Viewing on Each Device

Global 4K UHD Sales Volumes (in Millions)

2014 2015 2016 2017

10.2

31

52.7

81.9

Source: GfK

The New Normal for TV(Revenues in Billions USD)

2012 2013 2014 2015 2016fcst 2017fcst0

20

40

60

80

100

120

140

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

127 132 135119 106 102

3

11 8 5

-12%

0% 0%

-14%-11%

-3%

141 141

122108 105

141

3 OLED

Plasma

CRT

LCD

y/y TV

Global Wearables Market In High Gear(Units in Millions)

2014 2015 2016fcst 2017fcst0

20

40

60

80

100

120

140

160

180

0%

20%

40%

60%

80%

100%

120%

2645

6687

19

38

757

8

11

14122%

58%50%

35

77

122

184

3Others Wrist Sport Computer Smartwatch Health & Fitness Tracker y/y Wearables

Western Europe and China key markets to watch in 2017, as they gain on the U.S. market’s early wearables lead

VPS 16 eye-tracking glasses

Gear S3 smartwatch Spartan Boxer Brief

Wearables: Double-Digit Revenue Growth(Revenues in Billions USD)

2014 2015 2016fcst 2017fcst0

5

10

15

20

25

0%

20%

40%

60%

80%

100%

120%

2 3 4 51

4

8

12

1

1

1

2

1

2

3

130%

59%

41%

9

15

4

21

REGIONAL FOCUS

Latin America – Tech Spending Analysis

20122013

20142015

2016...

2017...0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0

3 5 0

4 0 0

4 5 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%444 426 412

344294 281

-8%-4% -3%

-16% -15%

-4%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

69 73 77

5458

50

-15%

6% 6%

-30%

8%

-14%

Values (USD bn)

Latin America | Seeking Economic Redemption?

• Brazil – tough recession, infrastructure• Argentina – more economic weakness• Venezuela – soaring inflation

• Economic challenges dim 2017 outlook for tech spending

• Telecoms is expected to return to growth in 2017, while the other main categories continue to decline

• Some emerging product markets are still small

North America – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

2 0 0

4 0 0

6 0 0

8 0 0

1 ,0 0 0

1 ,2 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%1,310 1,242 1,274 1,303 1,276 1,272

-4% -5%3% 2%

-2% 0%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

220236 231 234 225 223

-4%

7%-2% 1%

-4% -1%

Values (USD bn)

North America | Three Amigos?• USA – CCI=113.7 highest since 2001. Employment/wages, spending

and interest rates up. • Mexico – modest growth. Crime, corruption, immigration issues

present headwinds.• Canada – impact of oil slowdown. Trade with USA and EU to rise.

• Demand for 2017 revised up, driven by expected improvement in smartphones and PC demand.

• Revenue decline expected to moderate slightly due to increasing ASP’s within main sectors

• Wearables and audio products are among the fastest growing products.

Western Europe – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

2 0 0

4 0 0

6 0 0

8 0 0

1 ,0 0 0

1 ,2 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%1,300

1,227 1,218 1,166 1,129 1,126

-5% -6%-1%

-4% -3%0%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

5 0

1 0 0

1 5 0

2 0 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%195 194 195

166 162 158

-8%0% 0%

-15%

-2% -2%

Values (USD bn)

Western Europe | Mind the Gap

• Brexit impact and potential aftershocks still unclear• EU public debt; immigration tensions spark

nationalism• More headwinds to economic growth than

tailwinds

• Smartphones sales stable. Softening demand for other major categories.

• Streaming video adding new life to living room entertainment.

C&E Europe – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

1 0 0

2 0 0

3 0 0

4 0 0

5 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%568 550 520

432 414 408

3%-3% -6%

-17%

-4%-1%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%64 6559

40 41 40

2% 1%-8%

-32%

1% -2%

Values (USD bn)

C&E Europe | Going for Growth!• Central and Eastern Europe economy growing steadily at

3.0%. EU development funds to fuel more growth although currencies pressures present headwinds. Trade tightening could hurt.

• Ukraine and Russia remain in focus 2017.

• Marginal improvement in tech end-demand in most countries. 2016 revenue gains defined by smartphones and LCD TV.

• Replacement cycles quickening. Sales orient towards higher-end devices with better user experience and higher ASP.

• Growth continues for emerging products like wearables.

Emerging Asia – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

2 0 0

4 0 0

6 0 0

8 0 0

1 ,0 0 0

1 ,2 0 0

1 ,4 0 0

1 ,6 0 0

1 ,8 0 0

2 ,0 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%1,877 1,922 1,936 1,835 1,830 1,816

4% 2% 1%-5%

0% -1%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

249276 276 279 286 280

10% 11%0% 1% 2% -2%

Values (USD bn)

China = fully developed tech market

• China

• Malaysia & VietnamUtility /

Productivity

• Indonesia• PhilippinesCommunication /

Information

• Tech is fully integrated into daily life & used for enjoyment / entertainment

• Few barriers other than access to brands

• Robust channels – online purchasing

• Tech use more basic – supports communication & productivity

• Markets still developing in terms of:• Internet• Channels – largely in-store

purchase which may contribute to limited access

Entertainment

Emerging Asia | Growth Beyond China

• China GDP 6.4% in 2017 as turn toward service/innovation economy continues.

• India is the new China. GDP growth 7.5% through 2020.• Other countries seeing lift in end-demand. Chinese brands

capitalizing.

• Smartphones dominate the tech landscape.• Bifurcated strategy: budget phones and high-performance

models.

• Among fastest-growing products are 4K Ultra HDTV, action cameras, wearables and audio products.

June 7-9, 2017Shanghai, China

Developed Asia – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

1 0 0

2 0 0

3 0 0

4 0 0

5 0 0

6 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

659 641 643604 593 595

-8%-3%

0%-6%

-2% 0%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%128

116 11096 98 96

-4%-10%

-5%-13%

2% -1%

Values (USD bn)

Developed Asia | Active Aging with Technology

• Weakness moderates in all key countries, 2017 outlook for Japan GDP growth is positive, but still historically low.

• South Korea moving past political scandal

• PC sales improving; smartphone outlook stable. • Photo declining.

• Wearables seeing strong growth. • High adoption of active aging tech?

Middle East & Africa – Tech Spending Analysis

2012 2013 2014 2015 2016fcst 2017fcst0

1 0 0

2 0 0

3 0 0

4 0 0

5 0 0

6 0 0

7 0 0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

676 700 707 705 675 688

9%4% 1% 0%

-4%2%

Units (M)

2012 2013 2014 2015 2016fcst 2017fcst0

2 0

4 0

6 0

8 0

1 0 0

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

7885

9285 80 81

10% 9% 7%

-7% -6%1%

Values (USD bn)

Middle East & Africa | Hope for Peace

• Conflicts across the region continue to create headwinds to growth.

• 2017 outlook remains positive, driven by improved demand in a some countries, as UAE and Egypt.

• Smartphones domination of tech landscape even more pronounced here.

• Rising competition driving down prices, but also revenues.

Global Tech Spending Share by Region

2012 2013 2014 2015 2016fcst 2017fcst7% 7% 7% 6% 6% 5%6% 6% 6% 4% 4% 4%

22% 23% 22% 25% 24% 24%

25% 26% 27% 29% 30% 30%

8% 8% 9% 9% 8% 9%

19% 19% 19% 17% 17% 17%

13% 11% 11% 10% 10% 10% Developed Asia

Western Europe

M.E. & Africa

Emerging Asia

North America

C&E EuropeLatin America

Global Consumer Tech Unit Sales Leveling Off(in Millions)

2012 2013 2014 2015 2016fcst 2017fcst0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%6,835 6,708 6,711 6,389 6,211 6,187

-1% -2%0%

-5%-3%

0%

Units y/y

Global Consumer Tech Spending(Billions of USD)

2012 2013 2014 2015 2016fcst 2017fcst0

200

400

600

800

1,000

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%1,005 1,045 1,040955 950 929

-1%

4%

-1%

-8%

-1%-2%

Values (USD) y/y

Why is Global Tech Spending Lower?• Strong dollar unfavorable to conversion of global currencies.

– Global GDP growth of 3.4% in 2017 – China growth moderating, Euro and Yen weak

• Volume growth flat / negative in core categories: Smartphones, PCs, TVs – Tablets units down 10% in 2017

• Retail prices trending lower in categories with big impact: – Smartphones (-3%); TV (-5%); Laptops (-1%)

• Uncertainty underscores outlook for end-demand– Geopolitical (Trump, Russia); Trade risks (TPP, Brexit), Commodities pricing (Oil)

Steve KoenigSenior Director, Market Research

@KoenigSteve

Go here for slides: CTA.tech/salesandforecasts

Closing Announcements

ces 2017 exploring the global consumer tech industry

Presentations & Public Speaking