Report: Consumer electronics sales picked up in Q2

SAN FRANCISCO—Despite returning to sequential growth in the second quarter, the global consumer electronics market is still on pace to contract overall in 2009, according to the latest analysis from market research firm iSuppli Corp.

Global consumer-electronics equipment revenue rose to $71.1 billion in the second quarter, up 4.2 percent from $68.3 billion in the first quarter, based on a preliminary estimate from iSuppli (El Segundo, Calif.). Second quarter revenue declined by 11.3 percent compared to the same period of 2008, the firm said.

In the first quarter, consumer electronics revenue fell by 25.8 percent compared to the fourth quarter of 2008 and by 10 percent compared to the first quarter of 2008, according to the firm.

"Following the dismal first quarter, conditions are starting to improve in the consumer electronics business," said Sheri Greenspan, a senior analyst for consumer electronics at iSuppli, in a statement.

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Greenspan projected that revenue would continue to grow sequentially in the third and fourth quarters, rising by 12. 5 percent and 10.2 percent, respectively.

"While this growth is encouraging, 2009 will still be a down year for the industry," Greenspan said.

According to iSuppli's latest forecast, global consumer electronics equipment revenue will decline to $307.6 billion in 2009, down 8.2 percent from $335.2 billion in 2008, due to the impact of the worldwide economic downturn as well as sharply declining prices for key products.

Greenspan said consumer electronics vendors have responded to the recession by cutting prices on popular products to boost sales, including digital still cameras, video game consoles and LCD-TVs. Greenspan said the strategy is working to a degree, with aggregate consumer electronics product unit shipments set to rise sequentially by 5 percent, 16.1 percent and 14.1 percent in the second, third and fourth quarters.

But after a 29.9 percent plunge in the first quarter, these sequential increases won't be enough to prevent a 4.8 percent decline for all of 2009, according to Greenspan.

Of the 19 consumer electronics product segments tracked by iSuppli, only four experienced a sequential revenue decline in the second quarter compared to the first, the firm said. These included handheld video games, video game consoles, camcorders and the moribund segment of rear-projection televisions, according to the firm.

ISuppli is offering for a sale a new report on the state of the consumer electronics industry through the firm's website.