Led by TV innovation, CE sales to top $211.3BN
Michelle Clancy The US Consumer Electronics Association (CEA) predicts that factory-to-dealer sales of CE products will increase 2% to $211.3 billion by the end of 2014.

Looking ahead to 2015, CEA expects industry sales to grow by 1.2%, with industry revenues reaching another all-time high of $214 billion.

Video innovations within the television category will in particular help drive sales this year, as consumers choose larger screen sizes and premium display features to upgrade their home video experience. Despite a steady decline in average wholesale prices, TV sales remain critical to the industry's overall bottom line with total TV sets and displays projected to reach $18.4 billion in 2014, down 5% from 2013.

The continued market growth of UltraHD TV is performing better than initially projected in 2014, CEA said. Unit shipments of UltraHD displays are expected to reach 800,000 in 2014, earning $1.9 billion in revenue, a 517% increase over the 2013 total. Revenue from Ultra HD displays is projected to exceed $5 billion in 2015, an impressive total considering that revenue was virtually non-existent three years earlier.

LCD TVs meanwhile will account for 94% of all digital display sets sold this year, with 36.7 million units expected to ship to dealers in 2014. That total will produce $17.3 billion in revenue, in line with 2013 levels as the third-highest revenue driver to the CE industry.

"These top revenue-driving products, namely LCD flat panel TVs and mobile connected devices, can now be found in millions of households in a remarkably short amount of time," said Steve Koenig, CEA's industry analysis director. "This has resulted in a crowded market, naturally lending itself to slowed revenue growth. Yet we're at an interesting turning point in technology, as these same products are increasingly adopting premium, differentiating features, driving consumer interest and creating opportunities across other categories in the industry."

As the sales leader of the industry, smartphone unit shipments are projected to reach 163.5 million this year, up 8% from the 151 million units sold in 2013. Additionally, smartphone revenues are expected to generate $46 billion in 2014, a 7% increase from $43 billion in 2013. Unit sales of tablets are projected to reach 80.4 million this year, a 4% increase from 77.4 million in 2013. Revenues for tablets will reach $25.6 billion this year, down 3%. Overall, sales of smartphones and tablets will continue to stand as the top two revenue drivers of the CE bottom line in 2014. These two devices alone will represent 35.1% of total CE industry revenue in 2014. Although revenue growth for this category has slowed, unit sales will continue to see increases.

The growth to date is driven in part by the skyrocketing sales of connected devices. CEA's forecast however projects that revenues from emerging product categories will grow by 242% year-over-year in 2014, and another 108% in 2015, driven by developing technology categories that include 3D printers, health and fitness devices, smart watches, Ultra HDTVs and smart thermostats.

Cumulatively, while the emerging product categories represent less than 3% of the entire CE industry revenue, they are expected to contribute almost $5 billion to the overall CE industry in 2014. That total is an astounding jump from just two years ago, when revenue from these categories was too small to track, CEA said.

"There has never been a more exciting time for the technology consumer," said Gary Shapiro, president and CEO, CEA. "Across the consumer electronics industry, companies are packing more innovative features than ever into products that have quickly become indispensable — even as the industry continues to introduce breakthrough innovations that are capturing the hearts, minds and imaginations of consumers across the nation. Emerging tech categories including wearable devices, Ultra HDTV and 3D printers are generating tremendous consumer excitement and cementing their place as the next generation of 'must have' products."