Connected Devices Drive Electronics Growth

April 18, 2014
The global need to stay connected continues, with 6 billion new Internet-enabled devices to be produced in 2014.

The world market for Internet-connected devices will rise 6% over 2013 to represent the largest increase in four years, according to industry researcher IHS Technology. Global demand for cell phones, tablets, and computers will push production of connected equipment to 6.18 billion units this year compared to 5.82 billion in 2013. Production rates will slow in the next few years, although total units produced will still increase, IHS adds (see the figure). The market hasn’t seen such growth since 2010, when global production of connected equipment rose 10%.

“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,” explains Jagdish Rebello, senior director for information technology at IHS. “Given the voracious appetite of consumers for social media and their yen for always-on connectivity, it’s little surprise that makers will continue to turn out such devices to keep buyers engaged.”

Connected devices allow users to interact with the Internet via embedded connectivity made possible through built-in semiconductors. Video game consoles, media tablets, mobile handsets, LCD televisions, set-top boxes, and mobile PCs are among the fastest-growing products in 2014. Digital still cameras, camcorders, desktop PCs, DVD players, and portable media players are expected to decline in production.

Game consoles are expected to see the largest growth numbers, up 45% following a seven-year drought of new models. Sony’s PlayStation 4 and Microsoft’s Xbox One lead the pack, according to IHS. Media tablets and cell phones will see substantial growth this year as well, with production up 25% and 7% respectively. The outsize presence of market leaders Apple and Samsung in particular will keep average selling prices of media tablets and cell phones elevated as a whole, resulting in larger factory revenue projections, IHS says.

The mobile PC segment also is expected to perform well, including tablet PCs, though overall PC production is expected to rise by just 2%. Industry watchers expect a new class of entry-level PC tablets to make a difference, driven by a new generation of processors from chipmakers Intel and AMD. Additionally, IHS expects LCD TV production to rise 5%, driven by emerging markets, and set-top box production to rise 7%, spurred by cable digitalization.

IoT/M2M Market Growing Strong

The Internet continues to be an industry game changer all around, as a separate report on the growth of the Internet of Things (IoT) and machine-to-machine (M2M) communications market also attests. Researcher MarketsandMarkets pegs the segment’s growth at a compound annual rate of 24% over the next five years, reaching nearly $500 billion by 2019. The March report also outlines key segments, drivers, restraints, opportunities, and challenges in this new and growing market.

IoT is all about connectedness—connecting people, processes, and things to the Web—and it presents a wide range of opportunities for manufacturers, distributors, and makers of electronic components. The researchers expect IoT and M2M communication to bring physical business benefits such as high-resolution management of resources and products, better collaboration between enterprises, and improved life-cycle management, pointing to key industry verticals such as public safety and security, retail, residential markets, IT, and telecommunications.

The report (available for purchase at analyzes global adoption trends and future growth potential, along with the competitive outlook, market ecosystem, and value chain of the IoT and M2M communications market. It also examines market size and revenue forecasts for North America, Europe, Latin America, Asia Pacific, and the Middle East and Africa.

IHS Technology expects the global market for connected devices to rise from 5.13 billion units in 2009 to 6.58 billion units in 2017. (courtesy of IHS Technology)

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