Spending On Gadgets Shows Shift In Priorities

SAN FRANCISCO—Global spending on hot electronic products increased in 2009, despite a difficult recession that brought an unprecedented decline in global per capita income, according to market research firm iSuppli Corp. According to iSuppli's estimates, global revenue from shipments of smartphones rose by 9.6 percent in 2009, while LCD-TVs experienced a 14 percent increase and netbook PCs surged by 90 percent. The attached figure presents 2009 annual percentage growth for global per capita income and for revenue from shipments of LCD-TVs, smart phones and netbooks. Worldwide per capita income in 2009 declined by 2 percent to $10,500, marking the first annual decrease since World War II, iSuppli (El Segundo, Calif.) said, citing U.S. government data. The contrast reflects a fundamental shift in how consumers are prioritizing their spending, iSuppli said. "There's been a measurable shift in how consumers are spending their disposable income," said Derek Lidow, iSuppli's president and CEO, in a statement. "In a time of great economic distress, when people had less money and spending on essentials like food and rent declined, consumers surprisingly used a disproportionate amount of their money to purchase new consumer electronics products." LCD-TVs unit shipments rose by 42 percent in 2009, while smart-phone shipments increased by 13.2 percent in and netbooks rose by 100.8 percent, according to iSuppli. Lidow said the latest electronic products have become top-priority spend items. Consumers are willing to buy the latest and greatest gadgets at the expense of other desirable items, including jewelry, vacations and dining out, he said. "This trend will continue as the economic recovery gains momentum, causing global revenue for consumer electronic products to rise in 2010 and beyond," Lidow said. According to iSuppli's forecast, global factory revenue from shipments of consumer electronics devices, including LCD-TVs, will rise by 3.2 percent in 2010 and grow by another 7.8 percent in 2011. The wireless communications segment, led by smartphones, will grow 10.8 percent in 2010 and another 13.1 percent in 2011, according to the firm. The computer segment rise by 7.8 percent in 2010 and 7.9 percent in 2011, the firm predicted. "The importance that consumers are placing on these electronic products when it comes to spending is very positive development for the global technology industry and should be a cause of optimism in the years to come," Lidow said.