Consumer Electronics: Quarterly Statement Q1 2021

March 2021

Sales of consumer electronics are projected to undergo a V-shaped recovery, following a 5% decline in value terms in 2020. As consumers become accustomed to the new normal, sales are forecast to return to growth in 2021.

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Key findings

V-shaped recovery for the industry

Sales of consumer electronics plummeted in 2020 due to the pandemic, as consumers cut down on discretionary purchases. With most markets emerging from lockdowns on a gradual basis, sales of consumer electronics are forecast to turn positive in 2021. That said, total sales are expected to recover to pre-pandemic levels from 2023.

Minimum differences between the latest baseline forecasts and previous (Q4 2020)

Euromonitor International’s 2021-2025 baseline forecast for the electronics industry, published in November 2020, has been updated in line with the new macroeconomic outlook. Reflecting the timeline of a gradual reopening of society, the step-by-step ending of lockdowns and a return to some degree of normality in the second half of 2021, our top line projection has seen only a marginal overall downgrade.

Consumers are looking for value

While consumer confidence was dented due to the pandemic, brands such as Xiaomi and TCL benefited as consumers looked for brands that offer better value for money. On the other hand, established brands such as Samsung and Apple are not expected to engage in price wars to boost sales, instead, more likely to focus on flagship products that offer higher margins.

Investment in new technology is critical to recovery

Companies are investing to reinvigorate consumer electronics demand with new enhancements to attract consumers. For example, LCD panels are now undergoing a massive upgrade to bridge the picture quality deficiency with OLED. Similarly, the rollout of 5G networks will also help push up average prices of smartphones and trigger strong demand for new models.

Local production to accelerate

The pandemic exposed the overreliance of companies on China as a manufacturing hub. The ongoing trade war between the US and China also left companies exposed to any change in trade policies. Companies will accelerate their plans for alternative production sites outside China.


Key findings

Q1 Consumer Electronics Update

Recovery in 2021 as consumers get used to the new normal
Learnings from key upgrades and downgrades
Laptops and wearables benefited from the pandemic in 2020
An Indian summer for laptops
Processor war to trigger a decline in PC sales
Smartphones suffered largest decline for a decade
Cheap phones proving popular
Netflix drives sales of LCD TVs as streaming services grow in tandem
Xiaomi and TCL benefit as consumers seek better value in TVs
Resurrection of LCD TVs through innovation
Renewed focus on health leads to stronger sales of wearables
Smart wearables offer affordable indulgence
Apple Watch leads the way despite later entry
V-shaped recovery has different impact on different products

Q1 Macroeconomic Update

Global baseline outlook: Downside risks to the recovery have declined
Uncertainty remains high, but with a more optimistic tilt
Real GDP annual growth forecasts and revisions from last quarter, AE (%, percentage points)
Real GDP annual growth forecasts and revisions from last quarter, EMDE (%, percentage points)
COVID-19 scenarios summary

About our Industry Forecast Model

About Consumer Electronics forecast updates
Euromonitor International and COVID-19: Forecasts and analysis
Consumer Electronics: COVID-19 data and reporting timeline


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