CES: Consumer Spending on Electronics Predicted to Decline

The amount of money estimated to be spent on consumer electronics will likely decline in 2014, as growth in smartphone and tablet sales slow and as prices continue to drop, according to the Consumer Electronics Association. 

 Global spending is expected to reach $1.055 trillion in 2014, down from an estimated $1.068 trillion in 2013, said Steve Koenig, Director of Industry Analysis for CEA, the organization that is staging this week's Consumer Electronics Show in Las Vegas.


Reasons for the decline include rapidly declining prices for tablets, which had been one of the sector's primary growth drivers over the past two years. New entrants, such as Unu's $200 Vyper tablet, are expected to gain traction this year, bringing down the average selling price for the category. Average spending each smartphone this year, for example, is projected to be $297 (unsubsidized price), down from $345 in 2013. Consumers are still expected to snap up tablets and smartphones in greater quantity -- enough to grow their overall revenue. 

In addition, spending on gadgets in developing markets, another hot growth engine, is expected to cool down this year as devices approach penetration and as prices continue their downward march, Koenig said. 

This is especially true in Asia, where revenue growth in developing regions is expected to slow to a crawl at 1%, down from a torrid 15% clip in 2013.

Within device categories, only four types are expected to grow in overall revenue this year -- tablets, smartphones, inkjet printers and video game consoles, thanks to the recent introduction of new models from Microsoft and Sony this past holiday. The rest, which include LCD televisions, laptops, desktops, media players and others, are expected to decline.