GfK global strategic insights analyst, Norbert Herzog and Omdia research director, Paul Gray shared their insights on the consumer electronics market during the recent IFA digital press conference.

2021 must be thought of as an exceptional, record year with growth of 12%, so naturally, there will be some challenges ahead with this base in mind, according to Herzog.

Among these challenges are increasing prices of raw materials and logistic costs, as well as the Covid Omicron wave hitting production in China. Herzog also noted the Ukrainian/Russia conflict having a significant impact on European consumer sentiment.

“This means we will see deceleration of growth in the market,” he said. “While we have seen significant growth of $150 billion in 2021, our forecast for 2022 is $35 billion – 75% less growth compared to last year but still 2% growth overall.”

GfK global strategic insights analyst, Norbert Herzog.

In terms of opportunities, Herzog pointed to the fact that more consumers want to work from home and are looking to upgrade to products that are not only more feature-rich but also more sustainable. He noted that premium sales grew by 32% in 2021, and that every fourth dollar is now spent on such aspirational products.

Omdia’s Paul Gray also gave his perspective on trends, noting that cloud gaming and home cinema would see a big boost in 2022 and beyond.

He noted the increase in TV watching driven by the pandemic – both linear, live TV from broadcasters but also from streaming. He says new players will enter the TV market – SKY Glass, or Amazon OMNI in the US – and that the purchasing model would become more like mobile phone buying, where the hardware comes as part of a subscription.

Omdia research director, Paul Gray.

“We also expect the home cinema market to grow as more consumers take advantage of Hollywood also now releasing movies in the cinema and onto streaming platforms simultaneously,” he continued. “We expect this to all add value to the home cinema market.”

Another way brands are adding value is through the move towards emissive technologies such as OLED which have grown strongly in Europe, according to Gray. “Samsung this year will launch its QD OLED products and it will be interesting to see how LCD technologies such as mini-LED fight back or respond to the challenge of OLED.”

Gray went on to add that consumers are increasingly looking for a digital and physical purchasing journey and that retailers who make this seamless will give them “a big opportunity for the win” in 2022.