Advertisement

Blog

Revving Up for the Holidays: Will It Be a Good Season?

As the busy holiday-buying season cranks up, the electronics industry starts buzzing with questions: How will consumer electronics sales fare this year? Will consumers open their wallets and spend more than last year on new devices? Which gadgets will they likely buy?

There are a few early signs popping up that may inject a bit of caution into this year's holiday outlook, while some other parts of the industry may see opportunities on the horizon.

On the downside, September did not bring the traditional uptick in semiconductor shipments that usually follows the summer months, which could signal a slowdown in different markets or geographies, according to this Reuters report. In particular, slowing growth in China and the threat of a possible deflationary downturn in Europe has raised cautionary red flags.

And, there's concern about the whether the tablet and smartphone market will keep its shine, and offset an ailing PC market. The Wall Street Journal reported that while PC sales have bounced up in the US and Western Europe, shipments fell in several Asian countries where people are migrating away from laptops and desktops in favor of tablet and smartphone purchases instead.

A main issue OEMs are dealing with is the same issue they have had to confront many times before: What form factor do consumers want? The answer is still not clear, but preferences are taking shape.

PCs seem to be less trendy, for instance. Worldwide PC shipments dropped 0.5% in the third quarter of 2014, said Gartner Inc. International Data Corp. pegged the drop slightly higher saying that worldwide PC shipments totaled 78.5 million units in the most recent quarter, a year-on-year decrease of -1.7%, which was “a sizable improvement” over the forecast of -4.1%, it stated.

Tablets also took a hit. According to Gartner, tablet sales growth is slowing in 2014 “as new hardware buyers turn to alternative devices and existing users extend the lifetime of their tablets.” Gartner projects that tablet sales worldwide will have an 11% increase from 2013 and represent 9.5% of total worldwide device sales in 2014. In 2013, tablet sales grew 55%.

“The device market continues to evolve, with the relationship between traditional PCs, different form factor ultramobiles (clamshells, hybrids, and tablets) and mobile phones becoming increasingly complex,” said Ranjit Atwal, research director at Gartner, in a statement.

The mobile phone market will hold its own, thanks to continued popularity of lower-end smartphones, notes a CNET article; Gartner forecasts that basic smartphones sales will jump by 52%, and “utility” smartphones, or white-box devices, will double, according to the article.

There are, however, some bright spots suppliers and OEMs can look forward to.

For example, total worldwide semiconductor capital spending is expected to grow more than 11% in 2014, compared to 2013, Gartner reported recently, an increase spurred by strong memory average selling prices and an uptick in demand for consumer products. Additionally, capital equipment spending is projected to increase 17.1% in 2014, fueled by strong memory average selling prices and increased demand for consumer products, the firm said.

And, Intel Corp.'s recent third quarter revenue jump contrasts the news of the PC's markets decline, and seems to point to healthy fourth quarter expectation for supply chain, inventory levels and operations. The semiconductor company's third quarter revenue rose to $14.6 billion, up $1.1 billion or 8% year-over-year. The company also had record quarterly unit shipments of PCs, servers, tablets, phones and Internet of Things, marking the first time Intel has shipped more than 100 million microprocessors in a quarter, according to its earnings report.

Given all these mixed signals, what kind of holiday season are you preparing for?

1 comment on “Revving Up for the Holidays: Will It Be a Good Season?

  1. Daniel
    November 25, 2014

    “As the busy holiday-buying season cranks up, the electronics industry starts buzzing with questions: How will consumer electronics sales fare this year? Will consumers open their wallets and spend more than last year on new devices? Which gadgets will they likely buy?”

    Jennifer, I think this Christmas seasons Apple's IPhone 6 and wearable devices may have a good sales. IoT based devices and wearable devices have a good market and peoples are eagerly looking for such innovative gadgets.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.