Connected-consumer-device-count rises, but no IoT-style explosion in view

Connected-consumer-device-count rises, but no IoT-style explosion in view

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By eeNews Europe

In this global market analysis, IH Technology looked at connected devices that allow users to access the Internet, such as cellphones, tablets and computers. Worldwide production of such connected equipment, the company estimates, will amount to 6.18 billion units this year, up 6% from 5.82 billion in 2013. This will be the largest increase for the market in four years, surpassed only by the 10% hike in production during 2010, a year after the global economic recession ended.

Production growth rates will then slow in the next few years, even though total units produced will continue to rise in absolute numbers. Between 2015 and 2017, an estimated 19.42 billion new devices will flood the planet, as shown in the chart above.

“The improved growth this year of the connected devices industry marks the return of higher production as manufacturers deliver all sorts of connectivity equipment to users,” said Jagdish Rebello, Ph.D., senior director for information technology at IHS. He classifies connected devices as equipment that allows users to interact with the Internet in some fashion, from as passive an activity as simply looking at photos in social media or streaming media content for consumption, to a livelier form of engagement, such as gaming in real time. The devices must possess embedded connectivity to figure in these tables.

Among connected devices, those expected to see higher production numbers this year include video game consoles, media tablets, mobile handsets, LCD TVs, set-top boxes and mobile PCs.

In contrast, equipment markets that will suffer reduced production this year are digital still cameras, camcorders, desktop PCs, DVD players/records and portable media players.

The biggest growth in production took place in the earlier years of the connected devices era in the first seven years after the new millennium, when production spiked by as much as 27% annually and yearly growth rates frequently hovered in the 20% range, Rebello noted.

Game consoles are forecast to enjoy the largest growth among all segments, up 45% this year in light of a major product refresh late last year following a seven-year drought of new models. The main products here are the PlayStation 4 from Sony and the Xbox One from Microsoft. Media tablets and cellphones also will thrive this year, with production up 25% for the former and 7% for the latter. IHS believes that the “outsize presence” of market leaders Apple and Samsung will keep average selling prices elevated as a whole, resulting in larger factory revenue projections.

Also expected to do well is the mobile PC segment, including tablet PCs, although production for all personal computers is forecast to rise by a much more modest 2%. A new generation of processors from Intel and AMD will enable a new class of entry-level pricing for PC tablets previously kept in the higher-end price range.

Two other major equipment segments for the connected devices market that will enjoy greater production in 2014 are LCD TVs, up 5%; and set-top boxes, up 7%. LCD TV growth will be driven by emerging markets.

Digital still cameras have seen a drop in sales of point-and-shoot models because of consumers switching to camera phones: higher-end digital single-lens reflex cameras continue to do well but not enough to offset the larger loss incurred by the point-and-shoot segment. Worldwide production of digital still cameras will be down 13% this year from 2013. Even-less-fashionable categories that will see a greater than 20% fall-off include camcorders and MP3 players.

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