Electronic Equipment Market to Slow in 2007 as CE Demand Cools

Echoing the firm's prediction for the semiconductor industry's relatively modest growth for the current year, analysts with market research firm iSuppli Corp. reported today that the global electronic equipment market's expansion will similarly decelerate slightly in 2007.

Although the past three years have seen an exceptionally strong electronic equipment market, iSuppli said that the growth will soon begin to slow. Worldwide revenue grew by 11 percent, 8 percent and 7.7 percent in 2004, 2005 and 2006, respectively, iSuppli said, with the strongest growth coming from PCs, mobile handsets and hot consumer-electronics products such as MP3 players and digital televisions. Currently, iSuppli predicts that the total electronics equipment growth in 2007 will drop to 6 percent.

According to iSuppli, the reason for the drop is due to cooling demand in a variety of sectors. For one, frenzied demand for new consumer-electronics products over the past four years has slowed: Revenue growth for the consumer-electronics market dropped by about one-third in 2006, to 9 percent, the firm said. And it is expected that growth will decline by more than one third in 2007, to a smaller, but "respectable" 5.2 percent revenue growth as the market slows and average selling prices continue to plummet, the firm reported.
Meanwhile, the wired communications segment is expected to post 3.1 percent revenue growth in 2007; the automotive electronics market is expected to post a 3.9 percent revenue increase in 2007; and the industrial market is expected to post 5.8 revenue growth for the year.

Not all news has been bad for the industry, however. As the consumer-electronics and other markets slow, the PC market has revived, iSuppli said. Strong growth for mobile PCs has continued in 2007 with robust first-half demand, particularly in Q2, that may put mobile PCs on track to repeat their 28 percent unit growth of 2006, iSuppli said. In addition, mobile handset growth remains vibrant in 2007 and is expected to end the year with a 10 percent unit increase.