CES: China, Emerging Asia to Lead Consumer Tech Growth
"Has North America's market share peaked? I think the answer is a resounding yes," says Steve Koenig, director of analysis for the Consumer Electronics Association.
LAS VEGAS -- Driven by untapped demand in huge markets, China and other developing nations will overtake North America in retail spending on consumer technology products for the first time in 2014, Steve Koenig, director of industry analysis for the Consumer Electronics Association, said in a press conference Sunday at the 2014 International CES show.
"Has North America's market share peaked? I think the answer is a resounding yes," Koenig said. "Spending leadership will be No. 2 for some time to come."
Koenig added that -- extrapolating from CEA's research, which tracks data at more than 340,000 stores in 80 countries-- worldwide growth in consumer tech spending will slow by 1 percent in 2014.
Robust smart phone and tablet sales -- which account for 43 cents of every dollar spent on consumer technology -- continue to impact sales of digital cameras, camcorders, GPS devices and other devices whose functions they replicate.
Smart phones and tablets had until recently offset the decline in other categories. But, with smart phone and tablet sales easing in mature markets such as North America, Koenig said, "The growth is becoming not enough to offset the decline. We're waiting for the next cycle of innovation to lift us again."
Global TV sales are returning to slow growth, thanks to falling prices and ever-larger screens at lower price points: Walmart sold out of a 70-inch screen priced at $1,000 during the 2013 holiday season. But Koenig said the market for televisions is being relentlessly tested by tablets. "There's less of a need to have multiple [TV] displays in the home when you have tablets you can take from room to room."
Koenig said global technology spending will be evenly divided between emerging and mature markets in 2014. Emerging Asia now leads the world in spending, anchored by China, which spent $282 billion on consumer tech in 2013.
China's dominance is a story of sheer numbers. Koenig pointed out that there are more than 160 Chinese cities with populations of 1 million or more, compared to nine in the U.S, adding that while most of the growth in China has come from major urban centers, the potential from China's smaller cities and rural areas is "mind boggling -- these vast untapped markets. By 2020, a third of every tech collar spent will come from China and the emerging Asia region."
Koenig also pointed out that the Chinese in particular are hungry for tech gadgets like smartphones, tablets and high-definition televisions. In the U.S., he said, 55 percent of consumers agreed with the statement "tech products supply me with the tools that I need for success." In China, 90 percent agreed.