iSuppli: Sales of Internet-Connected CE Devices Overtaking PCs

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EL SEGUNDO, CA - If you didn't already believe the Internet is transforming the electronics industry, consider this: Shipments of Internet-enabled consumer electronics devices will overtake PC shipments in 2013, according to a new IHS iSuppli Consumer Platforms Report.

Shipments of Internet-enabled consumer electronics devices - including televisions, game consoles, Blu-ray players, set-top boxes, digital media adapters and media tablets, but not smartphones - will surge to 503.6 million units in 2013, up from 161 million in 2010. In comparison, PC shipments will rise, but only slightly, from 222.3 million in 2010 to 253.3 million in 2013. By 2015, shipments of Internet-enabled consumer devices will reach an astounding 780.8 million units, compared with PC shipments of 479.1 million.

The Digital Living Room
“These new figures are the latest evidence that the Internet is not just for PCs anymore,” says Jordan Selburn, principal analyst for consumer platforms at IHS. “The Internet now is revolutionizing the consumer electronics business by delivering a range of products that can bring Web-based content to homes. Increasingly, each Internet-enabled consumer electronics device is vying to become the center of what is known as the digital living room, aggregating content throughout the home and serving up movies, television programs, videos and music. In the future, consumers will be more likely to access the Internet through their televisions than via their PCs.”

The top Internet-enabled devices last year were game consoles, with shipments of 50.5 million units, and televisions, with 40.0 million. However, media tablets are set to grab the top spot in 2011 with projected shipments of 61.9 million, up 214 percent from 19.7 million last year and leading the rise in shipments of Internet-enabled consumer electronics devices.

The media tablet, spurred by the massive success of Apple’s iPad, is projected to become the fastest-growing segment within this space. This year, Internet-enabled consumer electronics device shipments are anticipated to reach 241.2 million units, up from 161.0 million units last year and 108.3 million units in 2009. After the 49 percent increase in 2009 and this year’s growth, the market’s expected expansion in 2012 of another 50 percent will mean three straight years of improvement at this magnitude.

From virtually nonexistent levels just two years ago, media tablets will ship more than 300 million units by 2015 - 15 times greater than in 2010, for a five-year compound annual growth rate of 73.3 percent. No other Internet-enabled device in the next four years will come close to that kind of growth.

According to iSuppli, the media tablet appears to be the device that will pull customers into the era of the digitally connected home. It allows users to enjoy media—and not just content stored locally on the device or for viewing on the included display. With the right hardware, for example, consumers can push music from an iPad to an audio system or drive video to a large-screen display. And with other vendors beginning to support Apple’s proprietary AirPlay standard, the media tablet will be one of the first devices to fully integrate into the connected home.

Blu-Ray Players and Set-Top Boxes
In addition to media tablets, other Internet-enabled devices that will grow rapidly in the years to come are Blu-ray players and set-top boxes.

In the case of Blu-ray players, expansion will be driven by the growing uptake of high-definition displays as well as the mandatory adoption of Internet capability. After media tablets, Blu-ray players will have the second-highest compound annual growth rate at 37.9 percent.

Set-top boxes are still going strong because they offer features that cannot be duplicated by other systems - for example, obtaining content from sources such as video on demand and “catch up” television. This versatility is likely to make the device a long-term, high-value fixture.

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