Saturated CE market bolstered by emerging tech

EXCLUSIVE

The consumer electronics market was up 1.5 per cent in 2015 to £17.9 billion according to the latest figures from Futuresource Consulting.

The analyst’s CE Retail Market Update showed growth in the market as a whole. This was despite declines in certain sectors, such as TVs and mobile devices, which were offset by gains in wearables, smart home, headphones, soundbars and white goods.

The report said that although TV sales declined in 2015, they are forecast to recover as consumers replace their primary flat-panel TVs with larger screens offering 4K resolution and smart functionality.

Futuresource predicted that the market for smaller, secondary screens would continue falling as tablets and smartphones took over their roles.

Said Futuresource associate director Simon Bryant (pictured): “UK consumers are enthusiastic, impulsive tech adopters. Compared with other countries, we tend to buy now and assess the benefits later. As a consequence of this, the UK is generally saturated in many CE categories, but the short-term outlook for emerging categories like VR, wearables, and smart home is generally bullish, compared with other countries.”

The report revealed that while demand for home audio products grew healthily, revenues fell by four per cent to £605 million in 2015. Growth was dominated by Bluetooth speakers and soundbars, which are now replacing hi-fi and home-theatre systems as best-sellers. Headphones revenue grew eight per cent despite flat volume growth, helped by Bluetooth lifting average selling prices. Meanwhile, the take-up of certain premium features, such as multi-room, high-resolution audio and wi-fi, was rather underwhelming.

The researcher also expected that, despite the growth in digital media adaptors (OTT boxes and streamers, including Chromecast, Apple TV, Amazon Fire TV), the home video devices market would continue to fall as pay-TV and streaming services – notably Netflix – take their toll on the market for DVD and Blu-ray players.

In the wearables sector, Apple’s entry into the sector was seen as beneficial, but generally it was activity trackers and sports watches that have driven growth to date. The outlook remained positive, helped by certain mobile phone features integrating into watches, and VR driving growth for head-mounted displays.

In terms of the camera market, shipments continued to fall heavily, according to Futuresource, while average selling prices benefited from a trend toward premium and enthusiast products. Action camera sales plateaued, while average prices fell.

Turning to who sold what, Futuresource revealed that Apple and Samsung accounted for five out of every £10 spent on CE in the UK in 2015. Chinese vendors grew their combined share, primarily in mobile and TV, while Japanese vendors generally lost share.

Looking ahead, Futuresource Consulting predicted that spending in the CE market would fall two per cent through to 2019, while saturation in key categories, such as TV, would only be partially offset by growth in wearable tech, audio, appliances, and smart-home devices.

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