Consumer electronics lose sales power in 2012

PORT WASHINGTON — Despite a plethora of constantly changing products, the consumer technology industry saw its sales decline 2% in 2012, according to The NPD Group. This is on top of the less than 1% drop in 2011. Since 2010, consumer technology sales have declined by $4 billion.

“While sales fell in consumer technology for the second consecutive year, there was an uptick in Q4 which is cause for optimism,” said Stephen Baker, VP industry analysis at NPD. “After struggles with declining categories, and increasingly saturated markets over the last few years, fourth quarter’s results may be the first sign that even as a mature industry consumer technology can grow again, albeit with a very different dynamic than in previous growth spurts.”

The top five categories; notebooks, flat-panel TVs, smartphones, tablets, and desktop computers accounted for 53% of sales in 2012, up from 49% in 2011. Tablets and smartphones were the only two of the top five categories to post growth, and accounted for all the increase in revenue share among the top categories.  The rate of revenue decline for PC products accelerated year- over-year as tablet sales started to erode the computer marketplace.  TVs remained mired in a cycle of declining prices and weak volume as the strong momentum from the very large screen market was unable to offset stagnant demand.

 “While CE remains a dynamic industry the fact is that the stellar growth of the past few years has made growth today more difficult,” said Baker.  “Most market segments have high penetration rates and the demand for additional devices is slowing, or declining.  Tablets and smartphones have been able to stimulate demand for additional devices, but unfortunately it hasn’t been enough, yet, to sustain positive growth trends.”

Best Buy, Walmart, Apple, Amazon, and Staples were the top retailers, again, in 2012. Apple, Samsung, HP, Sony, and Dell made up the top five brands for the year and accounted for 45 percent of sales up from 42% in 2011.  Apple and Samsung accounted for $6.5 billion in increased sales in 2012, while the remainder of the consumer technology industry declined by almost $9.5 billion.