Growth returns to Western European consumer technology markets in Q1 2010. GfK TEMAX data shows that consumers are more willing to upgrade their home technology as well as experiment with new smartphone mobile technology.
GfK TEMAX data shows that, overall, the consumer technology market recorded 2.7% growth in Q1 this year compared to Q1 in 2009. Key technology sectors have recorded year on year growth, including Telecommunications (+4.9%), Information Technology (+3.6%) and Consumer Electronics (+0.7%) in Q1 2010. Smartphones, Windows 7 and LCD TVs are all driving factors of growth in their respective sectors.
Smartphones continue to drive growth in the Telecommunications market
While the telecommunications market declined by -3.2% in the fourth quarter 2009, the first quarter of 2010 returned to growth with a +4.9% increase year on year.
Growth in the telecommunications sector is being driven by the increasing demand for Smartphones as they make up 40% of the total sales value. In Western Europe one in five handsets sold runs a mobile operating system and uses a touchscreen or QWERTY keyboard as an input interface. Mobile Operating Systems include Symbian 60, Windows Mobile, Linux, Android, iPhone OS, RIM and Palm WebOS.
Internet access has become “ubiquitous” which is driving interest in mobile services to a much broader audience. Mobile email is becoming the alternative to the well perceived SMS services and navigation software often come pre-installed on the devices. Social networks have become the most popular apps on smartphones, adding more relevance and immediacy the PC at home. Furthermore, many of these mobile operating systems are also being used on netbooks and tablet PCs, which are being sold through network operators with 3G connectivity.
With a wide range of innovative, new smartphones showcased at the Mobile World Congress earlier this year and the recent interest in tablet PCs, growth in the telecommunications sector is likely to continue throughout 2010.
Windows 7 ignites upgrade cycle in the Information Technology market
The Information Technology market, the second biggest market behind Consumer Electronics in Western Europe, grew by +3.6% in Q1 2010 and is now worth EUR 11.5 billion.
Consumer demand is focusing on Mobile Computers, but also on accessories, peripherals, software and especially All-In-One-Desktop Computers too. The successful introduction of Windows 7 initiated a new replacement and upgrade cycle. Lots of consumers leapfrogged Vista, staying with existing installed hardware, software and even accessories and peripherals. Overlooking Vista led to many installed products being outdated upon the arrival of Windows 7, thus consumers were “ready” for an update. As consumers are becoming more aware, they are looking for a wide product range. As a consequence expectations for 2010 are positive following this trend in consumers’ attitude.
Strong demand for LCD-TV’s returns growth back to the Consumer Electronics market
Consumer Electronics, the largest technology sector in Western Europe, recorded year on year growth of +0.7% in Q1 2010. The impact of the recession on the Consumer Electronics markets no longer exists as demand for LCD TVs strengthens for three key reasons.
Firstly, most countries in Europe have a huge consumer demand for replacing the old CRT-TV with a new flat LCD-TV. Of course, the World Cup in South Africa is supporting this trend and quickening the desire to replace old TV sets. With the stabilisation of prices over the past months, the revenue situation also saw an improvement.
Secondly, the digital switch over is another contributing factor to the growth in this market. With analogue TV being phased out, new set top boxes or even a new TV set are required to receive digital TV channels. This development is most strongly observed in Spain (+16%), Italy (+6.9%) and Portugal (+4.4%). Home entertainment in general gained importance with better HiFi products or “TV ecosystems” becoming increasingly popular. Positive and substantial impulses were seen from Blu-ray, Home Theatre Sets, Loudspeaker Sets and of course High Definition set top boxes.
Finally, consumers’ willingness to invest in flat screens, HD and better sound systems for the home, is a clear sign of the “homing-trend”. This willingness-to-invest combined with the anticipated impact of the World Cup gives reason to expect an even better second quarter 2010.
2010 consumer technology outlook is positive
In addition, GfK TEMAX covers other consumer technology sectors in Western Europe and all but one experienced growth. Other technology sectors that grew in Q1 were Photography (+2.7%), Major Domestic Appliances (+ 4.1%) and Small Domestic Appliances (+6.5%), but Office Equipment and Consumables sector contracted -1.2% compared to the same period in 2009.
These positive growth figures in Q1 are likely to continue throughout the year and Michael Sauter, head of GfK TEMAX, comments that:
“The first signs for April are looking positive. Our data show the Technical Consumer Goods market continuing on the road to recovery, indicating more growth to come in Q2-2010.”
Check back in July for the latest data and analysis from GfK TEMAX
ABOUT GfK TEMAX
GfK TEMAX® is an index developed by GfK Retail and Technology to track the consumer durables markets. GfK TEMAX® is published internationally. The findings are based on surveys carried out by the retail panel of GfK Retail and Technology. The retail panel comprises data from over 340,000 retail outlets worldwide. Click here for all reports and press releases
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