Senior director of market research at CTA, Steve Koenig, gives an overview on the future of the global consumer tech industry.

1. Exploring the Global Consumer Tech Industry
Steve Koenig
Senior Director, Market Research
@KoenigSteve
Go here for slides: CTA.tech/salesandforecasts
You Are Here
#CES2017

2. Retail CE sales tracking at more than 340,000 retail stores in 80 countries.
U.S. sell-in (shipments) data for dozens
of CE categories on a monthly basis.
+ = Global Consumer Technology
Spending Forecasts

3. Consumer Electronics
● Audio and Video Accessory
○ Headphone
○ Universal Remote Control
○ Docking Speakers
◦ Bluetooth Pairing Speakers only
◦ Docking Speakers Excl. Bluetooth Pairing only
● Auto Multimedia
○ Car Entertainment
◦ Car Audio
◦ Car Speaker
◦ Car Vision
◦ Fixed Car Navigation
○ Portable Car Navigation
● Home Audio
○ Audio Home System
◦ Home Theatre System
◦ Music System
○ Hi-Fi Single Element
○ Loud Speaker
◦ Hi-Fi Loudspeaker
◦ Soundbar Speaker
Product Categories
● Home Video
○ Home DVD Player and Recorder
◦ Home DVD Player
◦ Home DVD Recorder
○ Home HD DVD+ Blu Ray
● Personal Audio
○ Portable Media Player
○ Radio Devices
◦ Clock Radio
◦ Portable Radio
◦ Radio Boombox
● E-Reader
● Recording Media
○ Memory Card
○ Other Recording Media
◦ CD R
◦ DVD R
○ USB Memory

4. Consumer Electronics
● TV
○ LCD TV
◦ 3D LCD/LED TV
◦ LED TV
◦ Smart LCD/LED TV
○ CRT TV
○ Plasma TV
◦ 3D Plasma TV
◦ Smart Plasma TV
● TV Set-Top Box
● Videogame Console
Product Categories
IT
● Monitor
● Other PC Peripherals
○ External HDD
○ Keying Device (Keyboard)
○ PC Speaker
○ Pointing Device (Mouse)
● PC
○ Desk PC
◦ All-in-One PC
◦ Desk PC (ex AIO)
○ Mobile PC
◦ Netbook PC
◦ Notebook PC
◦ Computing Tablet
○ Media Tablet
● Printing
○ Printer
○ Printer Cartridge

5. Photo
● Digital Camcorder
○ Action Camera
○ Digital Camcorder ex-Action Camera
● Digital Still Photography
○ Digital Still Camera
◦ Compact Camera
◦ Compact System Camera (Mirrorless)
◦ DSLR Camera
○ Interchangeable Lens
Product Categories
Telecom
● Mobile Handsets
○ Mobile Phone
○ SmartPhone
● Other Telecom
○ Headset
◦ Headset ex-Mobile Stereo
◦ Mobile Stereo Headset
○ Line Phone
◦ Fixed Line Phone
◦ Mobile Line Phone
● Wearables
○ Health & Fitness Tracker
○ Smart Eyewear
○ Smartwatch
○ Wrist Sport Computer
○ Locator
○ Connected Watch
○ Hearables

6. Analysis Considerations: Geographical, Financial
• North America
• Western Europe
• Developed APAC
• Exchange Rates (FX)
• Sales Tax
• Tech Subsidies
• Central /Eastern Europe
• Latin America
• Emerging APAC
• Middle East/ Africa
Developed Emerging

7. 0.81 0.96 6.94 118.50 1.34

8. 2016: The Year of the Unexpected

9. Global Economic Picture
6% 6% 5% 4% 4% 4%
13% 12% 11% 11% 12% 12%
17% 18% 19% 21% 22% 22%
8% 8% 8% 7% 7% 7%
8% 8% 8% 8% 7% 7%
24% 24% 25% 27% 27% 27%
23% 23% 24% 22% 22% 21%
2012 2013 2014 2015 2016Fcst 2017Fcst
GDP* distribution by Region - USD
C&E Europe/CIS Developed Asia Emerging Asia Latin America Middle East & Africa North America Western Europe
* Source: IMF, OCT 2016
World GDP
2016 = 3.1%
2017 = 3.4%

10. 2017 Global Economy:
Realignments, Long-Term Trends, New Shocks
• Uncertainty underscores outlook
• Brexit, trade risks and Trump
• Some firming of commodities pricing
• Sentiment toward emerging markets improving – Asia looking
strong
• Advanced economies wrestle with new political landscape
– USA, UK, Korea, Brazil
• China: consumer spending strong, capital spending weak

11. Technology’s Magnificent Seven
2015 = 79%
761 billion USD
2016 = 78%
740 billion USD
Share:
Total:
Global
Source: GfK/CTA Digital World

13. Technology’s (New) Magnificent Seven
2017 = 81%
754 billion USD
Share:
Total:
Global

14. Mobility Makes the World Go Round
25% 23% 23% 21% 19% 18%
38%
35% 34%
31%
29% 29%
4%
4% 3%
3%
2% 2%
33% 38% 40%
46% 50% 51%
2012 2013 2014 2015 2016fcst 2017fcst
Global Digital World Values (USD) share by Category
Smartphones
47%

16. Smartphones: Super Massive
61 38 24 14 11 9
260
352 379 401 431 432
17%
21%
3% 3%
6%
0%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
50
100
150
200
250
300
350
400
450
2012 2013 2014 2015 2016fcst 2017fcst
Global Mobile Values (USD bn)
390
402 416
442 441
321
Smartphones
Standard
Phones

17. Global Handset Volumes Steady
(Units in Millions)
920
735
594 476 421 370
673 1,004 1,231
1,320 1,399 1,444
8% 9%
5%
-2%
1%
0%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2012 2013 2014 2015 2016fcst 2017fcst
Mobile Phone SmartPhone y/y Mobile
1,742
1,825 1,796 1,819 1,814
1,597

18. Smartphones Value Share by Region (USD)
Latin America
7%
C&E
Europe/CIS
4%
North
America
18%
Emerging
Asia
39%
Middle East &
Africa
10%
Western
Europe
12%
Developed
Asia
10%
Developed
40%
Emerging
60%

19. 2011 2012 2013 2014 2015 2016 2017
Think Globally, Connect ‘Mobilly’
Global Tech Device Sales Revenue
51%
Other Device Categories
Smartphones and Tablets
63%
2017 Tech Spending
586 Billion USD
Smartphones
Tablets
Mobile PCs
Source: GfK/CTA Digital World
22%
44%

20. Global Tablet Volumes Trending Lower
(Units in Millions)
125
196
223
185
150 136
2012 2013 2014 2015 2016fcst 2017fcst

21. Have Global PC Volumes Crested?
(Units in Millions)
127 114 109 96 87 81
196 184 183 173 167 163
125 196 223
185
150 136
12%
10%
4%
-12% -11%
-6%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
100
200
300
400
500
2012 2013 2014 2015 2016fcst 2017fcst
493
515
454
404 380
449
-19%
-14%
-9%
-4%
1%
6%
0
50
100
150
200
250
Media Tablet
Mobile PC
Desk PC
y/y PC

22. Tablet Declines Impact Global PC Revenues
(Revenues in Billions USD)
81 72 69 59 53 50
143
134 132
115 114 111
58
68 67
48 38 34
1%
-3% -2%
-18%
-7% -5%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
50
100
150
200
250
2012 2013 2014 2015 2016fcst 2017fcst
273 268
221
205
195
282
-19%
-14%
-9%
-4%
1%
6%
0
50
100
150
200
250
Media Tablet
Mobile PC
Desk PC
y/y PC

23. Developed Regions Dominate Mobile PC Sales
778 749 731 726 723 664 684 679
2010 2011 2012 2013 2014 2015 2016 2017
Latin America
3%
C&E
Europe/CIS
4%
North America
32%
Emerging Asia
20%
Middle East &
Africa
10%
Western Europe
20%
Developed Asia
11%
Mobile PC Values share by Region (USD)
Developed
63%
Emerging
37%
Avg. Selling Price (USD)

24. Global TV Volumes Leveling Off
(Units in Millions)
210 220 235 230 225 227
20 11
613 10
8
-8%
0%
3%
-5%
-3%
1%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
50
100
150
200
250
2012 2013 2014 2015 2016fcst 2017fcst
242 249
235
228 229243
3 OLED
Plasma
CRT
LCD
y/y TV

25. Smaller Screens = Bigger Viewing Profile
62%
51%
16%
21%
5%
12%
14%
8%
3%
7%
1%
2%
2012
2016
Television Smartphone Laptop Desktop Tablet Other
Source: The Evolving Video Landscape (2012)
Source: 2016 Video Study
USA: Average Share of Video Viewing on Each Device

26. Global 4K UHD Sales Volumes (in Millions)
10.2
31
52.7
81.9
2014 2015 2016 2017
Source: GfK

27. The New Normal for TV
(Revenues in Billions USD)
127 132 135
119
106 102
3
11 8 5
-12%
0% 0%
-14%
-11%
-3%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
140
2012 2013 2014 2015 2016fcst 2017fcst
141 141
122
108 105
141
3 OLED
Plasma
CRT
LCD
y/y TV

28. Global Wearables Market In High Gear
(Units in Millions)
26
45
66
87
19
38
75
7
8
11
14
122%
58%
50%
0%
20%
40%
60%
80%
100%
120%
0
20
40
60
80
100
120
140
160
180
2014 2015 2016fcst 2017fcst
35
77
122
184
3
Others Wrist Sport Computer Smartwatch Health & Fitness Tracker y/y Wearables
Western Europe and China
key markets to watch in
2017, as they gain on the
U.S. market’s early
wearables lead

29. VPS 16 eye-tracking glasses
Gear S3 smartwatch
Spartan Boxer Brief

30. Wearables: Double-Digit Revenue Growth
(Revenues in Billions USD)
2 3 4 51
4
8
12
1
1
1
2
1
2
3
130%
59%
41%
0%
20%
40%
60%
80%
100%
120%
0
5
10
15
20
25
2014 2015 2016fcst 2017fcst
9
15
4
21

31. REGIONAL FOCUS

32. Latin America – Tech Spending Analysis
444
426 412
344
294 281
-8%
-4% -3%
-16% -15%
-4%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
50
100
150
200
250
300
350
400
450
2012 2013 2014 2015 2016fcst2017fcst
Units (M)
69
73
77
54
58
50
-15%
6% 6%
-30%
8%
-14%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
10
20
30
40
50
60
70
80
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

33. Latin America | Seeking Economic Redemption?
• Brazil – tough recession, infrastructure
• Argentina – more economic weakness
• Venezuela – soaring inflation
• Economic challenges dim 2017 outlook for tech
spending
• Telecoms is expected to return to growth in 2017,
while the other main categories continue to decline
• Some emerging product markets are still small

34. North America – Tech Spending Analysis
1,310
1,242 1,274 1,303 1,276 1,272
-4% -5%
3% 2%
-2% 0%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1,000
1,200
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
220
236 231 234 225 223
-4%
7%
-2% 1%
-4% -1%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
50
100
150
200
250
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

35. North America | Three Amigos?
• USA – CCI=113.7 highest since 2001. Employment/wages, spending
and interest rates up.
• Mexico – modest growth. Crime, corruption, immigration issues
present headwinds.
• Canada – impact of oil slowdown. Trade with USA and EU to rise.
• Demand for 2017 revised up, driven by expected improvement in
smartphones and PC demand.
• Revenue decline expected to moderate slightly due to increasing
ASP’s within main sectors
• Wearables and audio products are among the fastest growing
products.

36. Western Europe – Tech Spending Analysis
1,300
1,227 1,218 1,166 1,129 1,126
-5% -6%
-1%
-4% -3%
0%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1,000
1,200
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
195 194 195
166 162 158
-8%
0% 0%
-15%
-2% -2%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
50
100
150
200
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

37. Western Europe | Mind the Gap
• Brexit impact and potential aftershocks still unclear
• EU public debt; immigration tensions spark
nationalism
• More headwinds to economic growth than
tailwinds
• Smartphones sales stable. Softening demand for
other major categories.
• Streaming video adding new life to living room
entertainment.

38. C&E Europe – Tech Spending Analysis
568 550
520
432 414 408
3%
-3%
-6%
-17%
-4%
-1%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
64 65
59
40 41 40
2% 1%
-8%
-32%
1% -2%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
10
20
30
40
50
60
70
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

39. C&E Europe | Going for Growth!
• Central and Eastern Europe economy growing steadily at
3.0%. EU development funds to fuel more growth
although currencies pressures present headwinds. Trade
tightening could hurt.
• Ukraine and Russia remain in focus 2017.
• Marginal improvement in tech end-demand in most
countries. 2016 revenue gains defined by smartphones
and LCD TV.
• Replacement cycles quickening. Sales orient towards
higher-end devices with better user experience and
higher ASP.
• Growth continues for emerging products like wearables.

40. Emerging Asia – Tech Spending Analysis
1,877 1,922 1,936
1,835 1,830 1,816
4% 2% 1%
-5%
0% -1%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
249
276 276 279 286 280
10% 11%
0% 1% 2%
-2%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
50
100
150
200
250
300
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

41. China = fully developed tech market
• China
• Malaysia &
Vietnam
Utility /
Productivity
• Indonesia
• Philippines
Communication /
Information
• Tech is fully integrated into daily life &
used for enjoyment / entertainment
• Few barriers other than access to
brands
• Robust channels – online purchasing
• Tech use more basic – supports
communication & productivity
• Markets still developing in terms of:
• Internet
• Channels – largely in-store
purchase which may contribute
to limited access
Entertainment

42. Emerging Asia | Growth Beyond China
• China GDP 6.4% in 2017 as turn toward service/innovation
economy continues.
• India is the new China. GDP growth 7.5% through 2020.
• Other countries seeing lift in end-demand. Chinese brands
capitalizing.
• Smartphones dominate the tech landscape.
• Bifurcated strategy: budget phones and high-performance
models.
• Among fastest-growing products are 4K Ultra HDTV, action
cameras, wearables and audio products.
June 7-9, 2017
Shanghai, China

43. Developed Asia – Tech Spending Analysis
659 641 643
604 593 595
-8%
-3%
0%
-6%
-2%
0%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
128
116
110
96 98 96
-4%
-10%
-5%
-13%
2% -1%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
20
40
60
80
100
120
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

44. Developed Asia | Active Aging with Technology
• Weakness moderates in all key countries, 2017 outlook for
Japan GDP growth is positive, but still historically low.
• South Korea moving past political scandal
• PC sales improving; smartphone outlook stable.
• Photo declining.
• Wearables seeing strong growth.
• High adoption of active aging tech?

45. Middle East & Africa – Tech Spending Analysis
676 700 707 705
675 688
9%
4%
1% 0%
-4%
2%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
2012 2013 2014 2015 2016fcst 2017fcst
Units (M)
78
85
92
85
80 81
10% 9% 7%
-7% -6%
1%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
20
40
60
80
100
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD bn)

46. Middle East & Africa | Hope for Peace
• Conflicts across the region continue to create
headwinds to growth.
• 2017 outlook remains positive, driven by improved
demand in a some countries, as UAE and Egypt.
• Smartphones domination of tech landscape even
more pronounced here.
• Rising competition driving down prices, but also
revenues.

47. Global Tech Spending Share by Region
7% 7% 7% 6% 6% 5%
6% 6% 6% 4% 4% 4%
22% 23% 22% 25% 24% 24%
25% 26% 27% 29% 30% 30%
8% 8% 9% 9% 8% 9%
19% 19% 19% 17% 17% 17%
13% 11% 11% 10% 10% 10%
2012 2013 2014 2015 2016fcst 2017fcst
Developed Asia
Western Europe
M.E. & Africa
Emerging Asia
North America
C&E Europe
Latin America

48. Global Consumer Tech Unit Sales Leveling Off
(in Millions)
6,835 6,708 6,711
6,389 6,211 6,187
-1%
-2%
0%
-5%
-3%
0%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2012 2013 2014 2015 2016fcst 2017fcst
Units y/y

49. Global Consumer Tech Spending
(Billions of USD)
1,005 1,045 1,040
955 950 929
-1%
4%
-1%
-8%
-1%
-2%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
0
200
400
600
800
1,000
2012 2013 2014 2015 2016fcst 2017fcst
Values (USD) y/y

50. Why is Global Tech Spending Lower?
• Strong dollar unfavorable to conversion of global currencies.
– Global GDP growth of 3.4% in 2017
– China growth moderating, Euro and Yen weak
• Volume growth flat / negative in core categories: Smartphones, PCs, TVs
– Tablets units down 10% in 2017
• Retail prices trending lower in categories with big impact:
– Smartphones (-3%); TV (-5%); Laptops (-1%)
• Uncertainty underscores outlook for end-demand
– Geopolitical (Trump, Russia); Trade risks (TPP, Brexit), Commodities pricing (Oil)

51. Steve Koenig
Senior Director, Market Research
@KoenigSteve
Go here for slides: CTA.tech/salesandforecasts
Closing Announcements