This year, like every year, we look to the US Black Friday (and more recently also Cyber Monday) this (and next) week to foretell the remaining month's sales leading up to the holidays. The rumbling of concerned economists keeps rolling in but in stark contrast to the momentum of semiconductor and electronics demand, penetration, and consumer wish list rankings. What this means for the semiconductor supply chain is that in spite of the macro-economic concerns, electronics remains among the top consumer purchases forecasted for the 2014 winter holiday season.
Analysts weigh in (of course)
Financial analysts are especially keen to partake in the crystal ball moments for this week and next Monday. Most believe that the economic situation and overall health of the US economy are the same or somewhat improved from last year. That's an important piece of data – sure it comes with no numbers, but really, economics is, at its core, more about sentiment and people's (who intend to spend) viewpoints and comfort with spending than any magic set of numbers. If you'd like some data to go with this information, Citi Research recently provided a solid overview of the market place and economic conditions leading up to the holiday shopping frenzy days. Their data show 42% of people questioned see the current economy (in the US) as "somewhat healthy, but still recovering from recession." But more impressive is the results for the question about these same peoples view of their current, personal financial situation, to which 37% answered "same" and 30% "slightly better" than last year. 47% of the same people reported that their view of their anticipated gift spending budget was "the same" as last year; 18%, the next highest category, said their budget was "up slightly" over last year. These are significant views because taken with a more optimistic view of the (improving) economic situation, the consumer confidence to act on the wish for electronic purchases and gifts (again) this year is more likely to actually happen.
According to the same Citi Research report, "[e]lectronics are the 2nd most popular gift category at 11% which follows fine jewelers at 20%. Within electronics, TVs, desktop/laptop PCs and tablets [are] at top of list" [sic].
Cars to give smartphones boost in 2015?
Rather than go through the litany of possible devices that will be the in-demand sellers this coming Fall, suffice it to say that the obvious mentions, are, well, obvious: smartphones, laptop/chromebook/notebook PCs, TVs, fitness trackers, other wearables, audio and camera/video (if not a smartphone), and tablets as well as some gaming devices still seeing traction. What's really interesting and possibly another push as we look to 2014 gifts that will support 2015+ smart tech and SmartLife advantages, is another boost for the (already proclaimed mature) smartphone market.
While some of the latest smartphones are finding trouble gaining traction, and others are going stronger than originally anticipated, these devices are driving the growth in next-generation sensors and related BoM component sales. Along with the boost to the fast-growing sensor market, are vehicle sales which now have significantly more on-board electronics.
Reports from the recent LA Auto Show, such as the recent one fromÂÂ PC World, underscore the real elegance and improved connectivity that CarPlay and Android Auto hold for in-vehicle infotainment. The examples of these applications with seamless smartphone connectivity have been few and elusive as OEMs continue working to get it right before open releases. Hyundai was showcasing Apple's CarPlay and Android Auto (linked with Google Now) at the Auto Show in their 2015 Sonatas, according to the PC World article, giving attendees an opportunity to (finally) test drive the apps and connectivity with their smartphones.
2015 looking strong – secure your supply chain for agility
With consumers facing decisions around smartphones, and the lingering questions about the duration of "hot" smartphone sales, it is very encouraging to have secondary apps and devices like smartwatches and other wearables as well as cars that will require a more recent smartphone to provide the maximum enjoyment from these exciting new applications and SmartLife ubiquity. All part of the IoT era, to be sure, and with smartphones holding the central point for IoT, I don't think we should sound the over-saturation bell too quickly. Holiday sales will help give us insight to what consumers will be looking for out of 2015 smart tech experiences. We'll be here to give you the supply chain view of these data and opportunities.
What we can say with confidence is that shifts in demand and inventory will continue to occur in shorter cycles and with wider global reach, so ensuring your supply chain connections and inventory management as well as procurement strategies are solid is among the best general strategic positions to secure going into 2015. We know that volume and sales have been robust along the global semiconductor supply chain and all our signals tell us that will continue into 2015.