CE Shipments to Exceed $125 Billion This Year, CEA Predicts
Spurred by a projected 80% rise in dollar shipments of digital TV products, total consumer electronics (CE) industry factory sales are expected to jump 10.7% this year to $125.73 billion, CEA said in its annual consensus forecast report released on the eve of the Consumer Electronics Show (CES) in Las Vegas. If the 2005 forecast holds, it will mark the first time in a decade the industry logs consecutive double-digit increases, following 2004’s estimated 11% rise in shipments to $113.55 billion, CEA said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
CEA is projecting total DTV dollar shipments to exceed $19 billion this year. That’s based on a staggering 187% increase in unit shipments to 20.25 million, as the average factory value of a DTV product is expected to fall below the $1,000 mark for the first time. The projected growth would come on top of better-than- expected DTV unit shipment performance for 2004. About 7.31 million DTV sets and displays were sold to dealers last year, some 78% more than the 4.1 million shipped in 2003. The 2004 figure represents an upward revision by CEA from as recently as mid-Nov., when only 6.97 million were projected to be sold last year.
Flat-panel LCD and plasma displays, “as part of the overall transition” to digital, have shifted the TV business in the U.S. toward “a clear upgrade cycle,” CEA said. TV dollar shipments hit an inflation-adjusted record of more than $12 billion last year, “and this promises to shoot even higher” in 2005, when factory sales approach $15 billion, CEA said. Flat-panel DTV dollar shipments accounted for nearly 1/3 of total TV factory revenue in 2004, and that proportion is expected to rise to nearly 40% in 2005, CEA said. Total analog and digital LCD TV shipments are projected to rise 49% in units this year to 3.85 million and 52% in dollars to $3.07 billion, CEA said. Meanwhile, CEA predicted digital plasma shipments would climb 68% in units to 1.4 million and 41% in dollars to $3.6 billion.
The overall market in direct-view DTV receivers is projected to rise meteorically this year. CEA projected unit shipments would fall just short of 10 million in 2005, climbing 862% to 9.85 million. In dollar growth, the projection is that factory volume will rise 711% to $6.3 billion, as the price of the average product falls to only $636.
But the DTV picture for 2005 isn’t untarnished, according to the CEA report. Digital projection TV was a shining star for 2004, rising 35% in units and 45% in dollars. But CEA projected a market retreat in 2005, with unit shipments declining 6% this year to 3.1 million and dollar volume falling 10% to $4.8 billion. Moreover, DTV market penetration is lagging, CEA said. Based on sales tracking data and CEA phone surveys, DTV as of this month is installed in 12% of U.S. homes. That’s a jump of 4 percentage points from the 8% penetration rate of Jan. 2004. Reflecting an active holiday selling season, DTV penetration is 3 percentage points higher than in June 2004. Nevertheless, DTV penetration still pales in comparison with that of other key categories -- namely analog color TV, DTV’s target for replacement business, where products are installed in 98% of homes. The CEA reports don’t provide forecasts on expected household penetration.
Other findings in the report: (1) PVRs dropped below $300 in average factory price last year as unit volume soared 274% to 1.9 million (not including OEM or MSO- provided product). The forecast is for another 34% increase this year, as dollar shipments rise 26% to $682 million. (2) MP3 players “shattered all expectations” in 2004, as unit volume doubled to just under 7 million and revenue tripled to $1.2 billion, CEA said. For 2005, unit shipments are projected to break the 10 million barrier, rising 45%, while dollar shipments rise another 37% to $1.65 billion. (3) The audio business languished again in 2004 -- except the home theater in-a-box category, which jumped 34% in unit shipments, although only 1% in dollars. The category is projected to surpass 5-million unit shipments for the first time in 2005, while dollars advance another 1.2%.