Forecast: Electronics Industry To Recover In 2010 - InformationWeek

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Forecast: Electronics Industry To Recover In 2010

Mobile phones are projected to be the first market to achieve a sustainable recovery, says Gartner.

Mobile phone and PC sales are poised to start leading the electronics industry into sustainable recovery next year, a market research firm said.

Signs of the recovery should become evident in the fourth quarter of this year, becoming sustainable in the second half of 2010, as measured by a rolling 12-month comparison with the prior year, Gartner said. Electronics sales are expected to accelerate further in 2011.

"Almost all sectors of the electronic equipment market are still declining, and we will need to see markets hit bottom before we see the waves of recovery and a rebound to positive growth," Gartner analyst Klaus Rinnen said in a statement. "The wider process of rebounding will occur over a period of approximately two years."

The PC market is already reaching the bottom of its growth pattern, but the majority of electronic segments won't do the same until the second half of this year, Gartner said. The slow recovery will have an impact on semiconductor manufacturers. Chip sales are not expected to regain their 2007 peak at least through 2013.

PCs and mobile phones, the "bread and butter" of the electronics industry, are expected to be among the recovery leaders, Gartner said. But government stimulus on economic growth will also have an impact, and if growth fails to materialize, it could delay the recovery of some electronics segments and result in a second and lower bottom for the PC market.

However growth resumes, mobile phones are projected to be the first market to achieve a sustainable recovery, edging PCs by about one quarter. Higher-priced and highly consumer-dependent segments are expected to take longer.

"The semiconductor industry must prepare itself for significant changes in consumer buying behavior, technology demand patterns, and the supplier landscape," Gartner analyst Jim Tully said. "The current recession is pushing many suppliers to the brink of ruin, and several will not survive.


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