For First Time, Emerging Markets Eclipse North America in Consumer Electronics

As much as the new products on the CES exhibit floor will determine the future of the consumer-electronics experience, there is a bigger factor: which areas of the globe will have the biggest impact on the future direction of the industry?

At the show, Steve Koenig, director of industry analysis at the CEA, gave a presentation on some of the global market trends, and one thing is clear: the developing world, increasingly, will have more influence over the direction of product development.

“North America is no longer in the lead in technology spending, and that gap will expand in 2014 and widen,” he said. “There is strength in numbers as China has 160 cities with more than a million people. The U.S only has nine. And those middle-tier cities [in China] outperform the top-tier cities when the local suppliers come in to play.”

The developed Asia market is also having less influence because nations like Japan are saturated and mature and the CE market has dipped 8%. Western Europe is down 6% as the southern part of the continent has suffered, and the U.S. is down 1%.

But the Middle East and Africa? Up 6%. And emerging Asia is up 1%; Latin America, up 2%.

“Between 2018 and 2020, ” Koenig said, “a third of all tech dollars will come from China or an emerging market.”

As for what market segments will dominate, smartphones and tablets account for as much as 43% of the market and are also having a negative impact on GPS, gaming systems, and cameras. Look for 340 million tablet devices to be sold in 2014 (up from 242 million in 2013) and lower-priced models to boost adoption in the emerging markets even further. And, when all the counting is done, smartphone sales in 2013 are expected to top 1.2 billion (up from 1 billion in 2012) with the average price dropping from $345 to $297 during that period.

As for TV sales, CEA expects a return to slow growth, to 276 million globally. One of the problems for TV sales? Tablets are replacing the need for secondary sets in the home, reducing overall demand.

Added Koenig, “But the move to larger sets is a global phenomenon not limited to the U.S.”