Recently, the International Data Corp (IDC) published a new report about global consumer spending on electronic devices in 2019. The organization notes the sector will experience a compound annual growth rate (CAGR) of 5.1 percent for the next five years. As such, the market analyst firm supports the notion the semiconductor sector will experience a resurgence beginning in 2020.
The IDC’s Findings
According to the IDC, global consumer electronics spending will reach $1.68 trillion in 2019, a year-on-year increase of 5.3 percent. As such, the market will reach $2.06 trillion in value by 2023. The group notes half of the purchaser electronics expenditures are on traditional devices such as smartphones and personal computers.
The organization’s reporting concurs with Apple and Samsung experiencing stronger-than-expected sales for their latest mobile devices. Indeed, high consumer demand for the iPhone 11 prompted Apple to instruct its suppliers to increase production by 10 percent.
Furthermore, the IDC forecasts worldwide renewed interest in the segment will result in a 2.2 percent CAGR in traditional electronics through 2023. However, the organization predicts a considerably higher 13.2 percent CAGR for emerging consumer powered devices. For its purposes, the group included smart homes, augmented/virtual reality headsets, robotic systems, drones, on-demand services, and wearables as emerging consumer electronics technology.
Connected Spaces and Convenience
IDC research manager Stacey Soohoo noted two market forces would drive the growth of the device market. Contemporary consumers want their personal spaces to be online-enabled and streaming media capable. The organization specifically found automated home systems like Amazon Alexa and streaming services like Netflix will drive 90 percent of emerging consumer electronics spending.
Notably, several corporations have already taken steps to respond to the public’s desire for more online-enabled spaces and on-demand media.
In addition to enhancing the capabilities of its Alexa digital agent, Amazon has worked with more than 200 law enforcement agencies to popularize its Ring home security systems. The firm has poured millions into those products because the smart home security segment will be with an estimated $3.2 billion in 2026.
Similarly, Apple and Spotify have spent hundreds of millions of dollars to develop their respective podcast networks. Both corporations want to dominate the flourishing market, which will be worth more than $1 billion by 2021.
Even automaker Tesla has moved to make its vehicles more amenable to consumers’ interest in connectivity and convenience. The manufacturer’s cars and SUVs now allow owners to stream Netflix and YouTube while parked.
As the deployment of 5G networks will improve the functionality of smart home and streaming media, both segments will become more appealing to consumers. Accordingly, device makers will need new fifth-generation compliant chipsets to power their new products.
For semiconductor manufacturers, a rising tide will, in fact, raise all ships.