Consumer electronics market rebounds for 2010

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Global consumer electronics equipment manufacturing revenue in 2010 is set for a rebound from the downturn of 2009, setting the stage for a sustained rise during the next four years, according to market research firm iSuppli.

With consumer demand acting as the primary engine in propelling growth, overall original equipment manufacturer (OEM) revenue for consumer electronics in 2010 is projected to reach $340.4billion, up 6.2% from $320.7bn last year. The increase will more than reverse the 4.4% decline in 2009. According to iSuppli, the market will continue to climb steadily during the next four years, adding revenue ranging from $3bn to $18bn yearly, ending up more than $385bn by 2014. iSuppli analyst, Jordan Selburn, said: "Despite lingering uncertainty regarding the duration of the economic recovery, consumer confidence levels in 2010 are higher in all regions of the world than they were in 2009, suggesting that buyers will be more inclined to acquire new devices or upgrade old electronics equipment—both courses of action needed by the market in order to maintain growth." However, Selburn warns potential trouble could lie ahead, especially if the fragile economic recovery unspools. "Furthermore, inventories of consumer goods are beginning to accumulate, especially in lcd panels and televisions—where oversupply is starting to appear," noted Selburn. "And although overall unit shipments for electronic devices will keep growing in the years ahead, the continual price erosion that is a hallmark of the consumer market will lead to virtually flat revenue after 2012." According to the report, nearly every segment of the consumer electronics market is up from a year ago, but the strongest performers in the consumer electronics space are lcd tvs and Blu-ray players. iSuppli data indicates that lcd tvs will ship more than 178million units in 2010, bringing in revenue worth almost $95bn. Also performing solidly are Blu-ray players and shipments are forecast to reach 16.4million units this year, up 82.2% from 9.1million units in 2009. Selburn added: "Blu-ray player shipments will continue to rise at rates exceeding 50% for the next two years, after which expansion will moderate and level off. By 2014, Blu-ray shipments will amount to 68.9million - nearly eight times their 2009 level. "The long term picture for Blu-ray, however, may not be quite as optimistic as figures seem to indicate. Because other consumer systems such as video game consoles, digital media adaptors and televisions are increasingly able to stream movies and other video content, the need for a physical disc player—even one that plays the highest quality video—might diminish over time, especially as consumers become increasingly accustomed to streaming media. For this reason, iSuppli believes that Blu-ray players will not enjoy the same longevity as their predecessor: the DVD player."