SAN FRANCISCO—Rapidly growing sales of multifunction products like media tablets and smartphones are coming at the expense of demand for single-task consumer electronics products, according to market research firm IHS iSuppli, which projects sluggish sales for single-task devices like MP3 players and digital still cameras through at least 2015.
Shipments of smartphones and tablets will rise at compound annual growth rates (CAGRs) of 28.5 percent and 72.1 percent, respectively, for the years 2010 to 2015, according to IHS. Meanwhile, shipments of portable navigation devices (PNDs), portable media players (PMPs)/MP3 players and digital still cameras (DSCs) will either decline or remain flat during the same period of time, according to the firm's projections.
"The success of multipurpose electronic equipment, often coming at the expense of devices dedicated to a single task, is reshaping the landscape of the consumer electronics industry," said Jordan Selburn, principal analyst for consumer platforms at IHS, in a statement.
Selburn noted that the once red-hot MP3 player market has started an irreversible decline as smartphones and other products have added audio functionality as part of a much broader suite of features. Other products, including PNDs and DSCs have also been hurt, Selburn said.
"In many cases, users can replace a slew of dedicated systems with just one multipurpose device, gaining functionality and portability while simultaneously saving money," Selburn said.
Selburn said the arrival of tablets—a product category that continues to be dominated by Apple Inc.'s iPad—have put even more pressure on sales of single-task devices. Tablets can quite capably provide the functionality of e-book readers, music and video players, gaming platforms, PNDs and cameras in a single product, Selburn noted.
"The story of consumer electronics is an ongoing survival of the fittest, and multi-tasking systems such as media tablets will have a hand in turning yesterday’s hot consumer electronics gear into tomorrow’s fossils," Selburn said.
IHS projects that shipments of tablets will rise to 262.1 million units in 2015, up from 17.4 million in 2010. Smartphone shipments are projected to increase to more than 1 billion units in 2015, up from 294.3 million in 2010, according to the firm.
Meanwhile, global PMP/MP3 shipments are set to fall to 126.8 million units in 2015, declining at a CAGR of negative 6.8 percent from 180.1 million in 2010, IHS said. By contrast, PMP/MP3 shipments rose at a CAGR of 38.7 percent during the previous five-year period from 2004 through 2009, according to the firm,
IHS projects that PND shipments will decline to 37.2 million units in 2015, with a CAGR of negative 2.2 percent from 41.5 million units in 2010. This compares to a booming 88.9 percent CAGR from 2004 to 2009, according to the firm.
i more or less agree with the point that smartphones and tablets can only replace the likes of low end point&shoot cameras or the very basic audio MP3 players. but when it comes to serious photography then it will be a long long time before a nokia can replace a SLR !! similarly the ipod is unlikely to yield ground to a mobile phone when it comes to having Gbs of songs and albums. However still the prophecy holds true that the net number of such devices will go down.
In many places tablets have been repeatedly categorised as media devices. Has anybody considered tablets as a content creation device? I am sure this is soon going to happen. For instance, there was this indian tablet making company Notion Ink which introduced a tablet that had the eink display and can be used even under sunlight. It came packed with a set of office based tools. The question is how easy is it to use. Given that it is easy to use tablets for content creation, we could soon see the rate at which tablets are selling to increase.
I would have not expected so many smartphones shipped in the future based on current trends. The reason is that smartphones are too expensive for most people in China where much of the growth is. The smartphone market is China is still less than 10% of the market if I remember correctly.
It might be that tablets etc are cutting into CE devices, but perhaps not.
While CE devices like games, MP3 players and DVD players and such were changing rapidly there was some motivation to get a new one every couple of years. The rate of change has slowed down so now there is no significant motivation to buy a new MP3 player or whatever.
At the same time, tablets etc are changing fast so there is some motivation to get a new one.
These are perhaps independent trends rather than one killing off the other.
I agree with "goafrit" and "Himanshu_Gupta". Multi-function devices are often like Swiss Army knives... a poor functionality knife, a useless can opener and a bunch of other functions all much worse than a dedicated device. People still buy Swiss Army knives because often they are "good enough" at what they do.
As the multi-function products improve they get "good enough" for most people.
Some devices provide features that are very difficult to reach with multi-function devices. For example it is really hard to beat a Kindle (or equivalent) dedicated ebook reader. No tablet can provide a few weeks of reading usage on one charge and none have such a clear screen.
I believe that multitask devices are good until you are not serious about let's say gaming, music, photography etc. I have 5mp camera on my smartphone but i would still love to carry my DSC if i am going on vacation.
I always get a chuckle out of predictions in our industry that show a big future hockey stick, like the dark green line on smartphones. These are the kinds of charts that make investors, or management, pony up the big bucks. But they don't always come true now, do they?
Smartphones are huge and growing rapidly, no question about that. But extrapolation of today's reality into the future is always fraught with peril. Especially in our industry, something usually comes along that very few were expecting or betting on. Some companies (I didn't say Apple) bank on these huge long shots, hoping to create a demand where none existed. Sometimes they prove the charts to be all wrong...