Global Electronics Market Trends and Corporate Countermeasures

In 2012, China's export of mobile phones is expected to exceed 1 billion units, becoming the only driving force for the growth of China's communications products exports. However, behind the seemingly glamorous data, the chilling "profit" of China's mobile phone industry is exposed: export mobile phones account for nearly 80% of the global market, but 99% of the profits belong to Apple and Samsung, and many Chinese companies still can't earn it 1% profit.

In order to reverse this embarrassing situation of "increasing production and sales without increasing income", Chinese enterprises need to grasp the trend of the global market, make good use of technology, and be brave in innovation. Overall, the global market demand for consumer electronics, especially mobile electronics, continues to grow steadily. Emerging markets emerged as an important driver of growth. This global growth in consumer electronics is actually driven by some major macroeconomic, consumer and technology trends.

At the "2012 Autumn Global Sources CEO Summit" held in Hong Kong on October 12, elites from the international electronics industry gathered together to discuss global electronics market trends and countermeasures for Chinese export-oriented electronics manufacturers.

Market Trends

Analyze the global electronics market trends in terms of sales revenue, shipments, market share, mobile phones and tablets, and driving forces.

The latest data jointly released by the well-known market research company GfK (GfK) and the US Consumer Electronics Association (CEA) shows that from 2008 to 2013, the global technology equipment retail revenue generally showed a steady development momentum . In 2008, when the global financial crisis hit, retail sales of technology-based equipment totaled $966 billion. In 2009, the world economy entered a recession, and the retail revenue of technical equipment was 874 billion US dollars, a year-on-year decrease of 10%.

With the gradual recovery of the global economy, technology equipment retail revenue has achieved ten-digit growth for two consecutive years, reaching US$976 billion in 2010, an increase of 12% year-on-year, and US$1,072 billion in 2011, an increase of 10% year-on-year . In 2012, technology equipment retail revenue was estimated at $1,055 billion, down 2 percent year-over-year, due to lower shipments and the relative depreciation of the U.S. dollar. However, 2013 was back on a year-over-year growth trajectory, with retail revenue from technology-based equipment estimated at $1,117 billion, up 6 percent.

Technical devices referred to here include tablets, digital still cameras, desktop computers, traditional cell phones , LCD TVs, smartphones, laptops, etc.

Emerging markets are a major driver of global technology equipment retail revenue. Retail revenue in emerging markets has risen year by year, while retail revenue in developed markets has declined year by year. In 2009, the total retail revenue of technology-based equipment in emerging markets accounted for only 35% of the global total, while the proportion in developed markets was as high as 65%, nearly twice as much. However, by 2013, emerging market retail revenue will grow to $502 billion (45%), approaching developed markets' $615 billion (55%). During the year, total retail revenue of technology-based equipment in developed markets increased by only 8% compared to 2009, in stark contrast, total retail revenue of technology-based equipment in emerging markets increased by as much as 63% compared with 2009.

Among these technology-enabled devices, smartphones are the mainstay of sales in every major market. In 2012, smartphone retail revenue was the largest of all technology-based devices in Western Europe, North America, Asia Pacific Developed Markets, Middle East & Africa, and Asia Pacific Emerging Markets. In the three markets of Western Europe, North America, and emerging markets in the Asia-Pacific region, smartphone retail revenue accounted for 21%, 28%, and 27% of all technology-based equipment sales, respectively.

Shipments According to IDC and Morgan Stanley research, tablet shipments will overtake laptops in 2013. From 2010 to 2015, the global annual shipments of notebook computers did not change much, and grew slowly between 200 million and 218 million units. During the same period, annual tablet shipments grew rapidly, from 19 million in 2010 to 352 million in 2015, an 18-fold increase. In particular, in 2013, the shipment of tablet PCs reached 216 million units, surpassing the 215 million units of laptops in one fell swoop.

Market Share According to IDC's tracking and calculation of the mobile phone market, China, the United States, India, Brazil, and the United Kingdom are the top five smartphone markets in the world in terms of shipments. Among them, China and the United States occupy the top two market shares in the global market, reaching more than double digits. In 2011, the market share of the United States was 21.3%, ranking first, and China was 18.3%, ranking second; in 2012 and 2016, China surpassed the United States to become the world's first market share, reaching 26.5% and 23.0% respectively. In the United States, it was 17.8% and 14.5% respectively.

Market share in the U.S. and U.K. is declining. The UK fell from 5.3% in 2011 to 3.6% in 2016. Market shares in India and Brazil are rising. India rose from 2.2% in 2011 to 8.5% in 2016; Brazil rose from 1.8% in 2011 to 4.4% in 2016.

The compound annual growth rate of market share from 2011 to 2016 is the highest in India, with 57.5%; Brazil is the second with 44.0%; China is the third with 26.2%. It once again proves the importance of emerging markets to consumer electronics.

Phablet phones will emerge. According to the research results of Strategy Analytics, a well-known market research company, the proportion of global mobile phones and tablets in the total smartphone sales will increase from 1.90% in 2012 to 5.70% in 2017. From 2011 to 2017, the compound annual growth rate of global mobile phone tablet shipments was as high as 40%.

Strategy Analytics defines a phone tablet as a "sound-prioritized cellular handset with a screen larger than 5.25 inches" (in contrast, a tablet prioritizes data). This 5.3-inch device is seen as a sub-category for smartphones, because most people who buy mobile phones and tablets are to replace the smartphones they are using, and the marketing messages and channel strategies of sellers and operators put mobile phones and tablets. Positioned as a smartphone rather than a tablet. Samsung's Samsung Galaxy Note is a typical example of a mobile phone tablet.

Strategy Analytics conducted a user experience study in March of this year. The results of this survey show that the rapid development of mobile phones and tablets is in line with consumer preferences. The survey found that 4.3 inches is the most popular next-generation device size for consumers. 88% of smartphone owners say the ideal screen size for their next phone purchase should be larger than the screen of the device they currently own.

Strategy Analytics connected home device industry director Jia Wu said that mobile phones and tablets are a good opportunity for enterprises. Phone tablets fit the trend of larger screens on mobile electronics; Apple has yet to enter this niche; phones tablets are easier to market to businesses or the BYOD crowd.

Drivers GfK research finds that the growth in global retail revenue of technical equipment is driven by macroeconomics, consumers and technology. Zhou Qun, general manager of Gfk Market Consulting (China) Co., Ltd., said that in terms of macroeconomics, emerging markets have increased opportunities and value, expanded sales channels, and prices are facing deflation; Personalization, authorization, social networking, etc., enable consumers to have more initiative and flexibility; in terms of technology, interconnectivity, evolving human-machine interfaces, embedded content, applications, etc., have improved technical equipment, especially Efficacy and user experience of mobile devices.

According to research by the International Monetary Fund (IMF), 70% of global GDP growth will come from emerging markets, and 75% of global consumption growth will come from emerging markets, which are home to 3 billion people. Wu Xiongang, president of ARM China, said that this provides a good opportunity for Chinese electronic products to enter emerging markets outside China.

Corporate Countermeasures

Under the trend of the global electronics market, it is necessary for Chinese export-oriented electronics manufacturers to enter emerging markets. However, both emerging and developed markets require electronics manufacturers to effectively utilize new technologies and implement product innovations on appropriate platforms.

Leveraging Emerging Technologies Businesses need to focus on the opportunities presented by emerging technologies or devices, said George Stepancich, executive director of the Consumer Electronics Association (CEA). According to his observations, some major emerging technologies have emerged in the fields of digitization, audio, control, and sensing, which are worthy of attention by enterprises.

With regard to how enterprises can apply technology, Wu Xiongang, President of ARM China, and Zhou Qun, General Manager of Gfk Market Consulting (China) Co., Ltd. both put forward the idea of the platform. In Wu Xiongang's view, companies can consider building an electronic product platform, integrating TVs, mobile phones, iPods, washing machines, cars and other electronic devices into this platform, and play a role as a platform to improve the performance of each electronic device. This is called platform-based diversification.

In Zhou Qun's view, smartphones can play the role of platform carriers, that is, Integrate various software, programs, solutions, etc. into the smartphone platform.

Innovation For many Chinese electronics manufacturers, the choice of chips and operating systems often affects the effectiveness of product innovation.

In Wu Xiongang's view, companies can choose chip processors based on such criteria: the processor should be able to solve your problems; be able to redefine the trade-off between efficiency and performance; be flexible and transparent to applications; last but not the most Not important, save energy. As far as the chip is concerned, the system-on-chip is often selected.

Strategy Analytics Connected Home Device Industry Director Wu Jia took the smartphone operating system as an example to analyze its market share and help companies make choices. According to him, the top three smartphone operating systems range from Symbian (63%), Microsoft (13%), and Blackberry OS (10%) in 2007 to Android (63%) and Apple IOS (22%) this year. ), Symbian (5%), Android (48%), Apple IOS (21%), Microsoft (17%) in 2017.

Innovation enables companies to avoid choosing and compromising product cost and performance, according to George Stepancich, executive director of the Consumer Electronics Association (CEA). He believes that in order to develop more international markets, companies need both low-cost and high-performance products. The example of the United States also shows that companies must be able to provide very high-quality products, very innovative products, and must be able to provide them at a very reasonable cost.

He believes that consumers are getting smarter and more insightful, and the result is that consumers are not asking for cheap or good products, but the best products at the lowest possible price. This brings a challenge to technology companies, which is how to innovate. With innovation, the costs incurred will fall, which can actually lead to lower costs and better quality performance at the same time.

Because the mobile phone tablet is a market segment that Apple's mobile phone has not entered. The mobile phone tablet seems to be a good opportunity to break through the competition of Apple's mobile phone. However, companies that want to enter the market segment of mobile phones and tablets need to seriously consider a question: how can mobile phones and tablets innovate to surpass the iPhone 5?