Consumer electronics sales rebound

Consumer electronics have staged a recovery this year.

Consumer electronics makers are expected to grab sales of $340.4 billion for 2010, up 6.2 percent from the $320.7 billion seen in 2009, according to data released yesterday by iSuppli. That contrasts with last year when sales dropped 4.4 percent compared with 2008.

"As shown in the early results from Black Friday, consumer confidence levels in 2010 are higher in all regions of the world than they were in 2009, and buyers are more inclined to acquire new devices or upgrade old electronics equipment," Jordan Selburn, principal analyst for consumer platforms at iSuppli, said in a statement.

iSuppli also sees a sustained rise over the next four years, with sales ranging anywhere from $3 billion to $18 billion annually, reaching more than $385 billion in 2014. The growth will benefit a variety of manufacturers, including makers of TVs, DVD and Blu-ray players, digital cameras, portable media players, video game consoles, e-book readers, and other consumer gadgets.

Just about every product category is showing sales gains over last year, but the companies producing LCD TVs and Blu-ray players are at the top of the list, according to iSuppli. Across the globe, more than 178 million LCD TVs are likely to ship this year, bringing in sales of almost $95 billion. But this is traditionally a strong segment as even during last year's downturn, LCD TV shipments rose 40 percent.

Shipments of Blu-Ray players will hit 16.4 million this year, a jump of 82 percent over 2009. Sales will grow by 50 percent annually over the next two years, says iSuppli. By 2014, shipments will reach 68.9 million, almost eight times more than last year. But the longer-term outlook for Blu-ray players may be less rosy.

With video game consoles, media players, and TVs able to stream movies and other video content, the need for a device that plays physical discs may start to wane. As a result, iSuppli doesn't expect the Blu-Ray player to have the same relatively long lifespan as the DVD player.

After reaching a peak last year, shipments of dedicated portable media players are also likely to fall short as such devices increasingly face competition from smartphones that can also play multimedia.

Though its current forecast for consumer electronics is optimistic, iSuppli says that certain factors could put a damper on sales growth.

"Potential trouble could lie ahead, especially if the fragile economic recovery unspools and consumers decide to withhold precious spending dollars," Selburn said. "Furthermore, inventories of consumer goods are beginning to accumulate. 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 slowing revenue increases after 2012."