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Research group GFK has said the $14.9 billion dollar Australian consumer electronics, IT and appliance market is set for a “challenging” year where “diversification and innovation” is critical. They claim that the local economy is unclear and that consumer sentiment will remain “cautious”.
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They said that in the last quarter of 2011 it was smartphones that drove the market, with manufacturers, carriers and retailers achieving 41% growth across the category.
In comparison consumer electronics revenue fell by 14% during the quarter with the fall in TV prices contributing to the downturn.
In the final quarter of 2011 CE, Photo and IT also witnessed a fall in revenues while telecommunications overall grew by 65%.
The major and small domestic appliance market remained “steady” said GFK with the flat sentiment continuing into 2012.
GFK said that consumer sentiment is fragile and that the market is witnessing large swings in consumer sentiment, despite two consecutive interest rate declines in November and December.
Telecommunication market
New models launched at the start of the final quarter dominated the smartphone segment and helped drive bumper pre-Christmas sales which according to Telstra executives is continuing with the release of new 4G phones in the first quarter of 2012.
Smartphones accounted for almost three quarters of all mobile phones purchased in quarter 4, up from just under half in the final quarter of 2010. As a result, the Telco sector is now equal in size to CE, at an estimated $1.25 billion in retail sales.
Choice of operating system was a key market driver in 2011, while display size is emerging as a key point of difference. The highest selling screen size is between 3.5″ – 4″, however, smartphones with a screen size greater than 4″ have become more common accounting for one quarter of units sold in quarter 4 in 2011.
Technological developments have also led to more slim-line phones, with over 10% of smartphones sold in the quarter measuring 9mm or thinner.
PC and IT category
GFK said that although the IT sector continued to post healthy value growth (7% for the quarter), growth was significantly lower than the 14% growth in the first quarter and 12% growth in the third quarter.
GFK also claimed that main driver of the sector’s growth was tablets and that during the lead-up to Christmas, sales of tablets were particularly strong, with the segment out-selling notebook computers for two weekly periods in December.
Currently GFK does not track Apple sales, nor do they track sales of consumer electronics or IT products via JB Hi Fi stores.
The European research Company claims that tablets had a positive impact on sales of IT peripherals with consumers purchasing devices like Bluetooth keyboards at the same time that they purchased a tablet.
Keyboards accounted for a quarter of all dollars spent on tablet accessories in Q4 2011, compared to less than 5% in quarter 4 2010.
Photo: Product innovation buoys the sector
Despite a particularly tough quarter for the Photo sector, both DSLR cameras and Mirrorless compact cameras bucked the trend, reporting growth in both units and value.
In the struggling fixed lens camera segment GFK claims that suppliers are turning to innovative products such as weatherproof cameras because they attract an above average selling price that is more than an average point and shoot model.
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Consumer Electronics: Unit growth flattens; double-digit value declines continue
TVs and home theatre accounted for over half of the value of the CE sector, despite highly aggressive price discounting. This drove modest unit growth for the segment, and resulted in a double-digit value decline,
Low-end sales of 32″ and 40″ TVs were dominant over Christmas as a result of discounting also attracting sales was growth of 3D and Smart Internet connected TVs, with the latter accounting for more than half of the value of the segment in the final quarter.
Blu-ray player sales grew to achieve over 50% of the value of the DVD/Blu-ray segment during the run-up to Christmas, with price erosion driving the category.
By December, almost a third of DVD units sold were in the sub $35 price band, while sub $100 accounted for a quarter of all Blu-ray unit sales.
