Market Watch

Consumer Electronics Revenue Rises 8.1 Percent in 2004

January 03, 2005

Need more Information?

Hot products and market reorganization open floodgates of growth

Despite undergoing major upheaval, the consumer electronics market achieved impressive growth in 2004 due to strong shipments of products including Digital Televisions (DTVs), MP3 players, DVD recorders and digital still cameras.

Shipment revenue for consumer electronics products increased to $248.3 billion in 2004, up 8.1 percent from $229.7 billion in 2003, according to iSuppli Corp. Consumer-electronics-related semiconductor revenue grew to $44.4 billion in 2004, up 24.9 percent from $35.6 billion in 2003.

This will represent the strongest growth year for the consumer electronics market at least through 2008, and will be the best year since the boom of 2000, when shipments rose by 7.3 percent. This year will bring a moderate slowing in market growth, with shipment revenue expanding to $265.1 billion, up 6.8 percent from $248.3 billion in 2003.

Consumer electronics shipments will continue to grow over the next four years to reach $297.9 billion in 2008.

The consumer electronics market is receiving a boost from soaring shipments of hot products, including:
  • DVD video recorders. Due to the resolution of standards issues and the availability of lower-cost products, shipments of DVD video recorders expanded to 10 million units in 2004, up a whopping 200 percent from 3.6 million in 2003.
  • DTV sets. Price declines and greater availability of programming helped shipments of DTV sets to rise to 17.2 million units in 2004, up 148.3 percent from 6.9 million in 2003.
  • MP3 players. Led by the overwhelming success of Apple Computer Inc.'s iPod, shipments of MP3 players increased to 31.5 million units in 2004, up 85.3 percent from 17 million in 2003.
  • Digital still cameras. The year 2004 marked the first time that shipments of digital still cameras outstripped those of traditional film cameras. Digital still camera shipments expanded to more than 60 million units in 2004, up 29 percent from 46.4 million in 2003.
The success of the consumer electronics market comes at a time when the industry is facing some of the most wrenching changes in its history. From products, to technologies, to brands, to supply chains, the entire landscape of the consumer electronics business is being reshaped.

Beyond the advent of new products like flat-panel televisions and DVD recorders, major factors impacting the market include:
  • The growing importance of Chinese and Taiwanese OEMs and Original Design Manufacturers (ODMs). These companies manufacture products at rock-bottom cost and the ODMs are making their services widely available to customers, allowing new players to enter the consumer electronics market with highly competitive products.
  • Traditional PC companies, such as Dell, Gateway and Hewlett-Packard, have begun to address the consumer electronics market using the ODM model, placing greater price pressure on the incumbent players.
  • The waning influence of the traditional market leaders: the giant vertically integrated Japanese OEMs. The entry of the Taiwanese manufacturers, combined with the rise of new brand names, has eroded the market dominance of these companies.

Share facebook Twitter Google Plus Linked In Add This Contact Us