Top Connected Devices Include Video Game Consoles, Media Tablets, Mobile Handsets, LCD Televisions, and Mobile PCs
EL SEGUNDO, CA — The global market for connected devices that allow users to access the Internet is set to surpass 6 billion units this year, as new products including cellphones, tablets and computers enter the electronics ecosystem, according to a new report from IHS Technology.
Worldwide production of connected equipment will amount to 6.18 billion units this year, up a solid 6 percent from 5.82 billion in 2013. This will be the largest increase for the market in four years, surpassed only by the 10 percent hike in production during 2010, a year after the global economic recession ended. Production growth rates will then slow in the next few years, even though total units produced will continue to rise in absolute numbers. Between 2015 and 2017, an estimated 19.42 billion new devices will flood the planet.
Connected devices are defined as equipment that allow users to interact with the Internet in some fashion, from as passive an activity as simply looking at photos in social media or streaming media content for consumption, to a livelier form of engagement, such as gaming in real time. The devices must possess embedded connectivity, made possible through built-in semiconductors.
“The improved growth this year of the connected devices industry marks the return of higher production as manufacturers deliver all sorts of connectivity equipment to users,” said Jagdish Rebello, Ph.D., senior director for information technology at IHS. “Given the voracious appetite of consumers for social media and their yen for always-on connectivity, it’s little surprise that makers will continue to turn out such devices to keep buyers engaged.”
Among connected devices, those expected to enjoy higher production numbers this year include video game consoles, media tablets, mobile handsets, liquid-crystal display televisions (LCD TVs), set-top boxes and mobile PCs. In contrast, equipment markets that will suffer reduced production this year are digital still cameras, camcorders, desktop PCs, DVD players/records and portable media players.
The biggest surge in production took place in the earlier years of the connected devices era in the first seven years after the new millennium, when production spiked by as much as 27 percent annually and yearly growth rates frequently hovered in the 20 percent range, Rebello noted. These findings are contained in the report, “WLAN 802.11ac: Commercial Product Introductions Start to Ramp Up,” from the Telecommunications service of IHS.
Winning Segments Boast Numbers
Game consoles are forecast to enjoy the largest growth among all segments, up a mighty 45 percent this year in light of a major product refresh late last year following a seven-year drought of new models. The main products here are the PlayStation 4 from Sony and the Xbox One from Microsoft.
Media tablets and cellphones also will thrive this year, with production up 25 percent for the former and 7 percent for the latter. In particular, the outsize presence of market leaders Apple and Samsung will keep average selling prices elevated as a whole, resulting in larger factory revenue projections.
Also expected to do well is the mobile PC segment, including tablet PCs, although production for all personal computers is forecast to rise by a much more modest 2 percent. A new generation of processors from chipmakers Intel and AMD will enable a new class of entry-level pricing for PC tablets previously kept in the higher-end price range.
Two other major equipment segments for the connected devices market that will enjoy greater production in 2014 are LCD TVs, up 5 percent; and set-top boxes, up 7 percent. LCD TV growth will be driven by the emerging markets, while cable digitization will spur set-top box shipments.
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