Since the time the “electronic revolution” hit the telecommunication industry, the competition in the field has exponentially increased leading to furious investment and innovation, helping to give rise to the digital economy. The digital economy supported the development of many electronic appliances such as smart phones, watches, TVs, refrigerators, security systems, and of course, environmentally friendly electric vehicles.
According to the latest report Electrical and Electronic Manufacturing Market Briefing 2017 from The Business Research Company (TBRC), the global electrical and electronics manufacturing market is expected to reach $3 trillion by 2020, with Asia Pacific as the largest market by geographic region and China the biggest market by country. India is expected to grow at a heady 16.8% growth rate. Apart from providing market segmentation and growth by region and by country, the report also covers the top five trends in the electronics industry in the coming five-year forecast period.
1. Product Design Outsourcing
Original Equipment Manufacturers (OEMs) are increasingly moving product design and development processes to Electronic Manufacturing Service (EMS) partners. Product design, a part of the specialized design services market which is expected to reach $157 billion in 2020 according to TBRC, is being outsourced to reduce overall costs and shift from fixed costs to variable costs.
EMS companies are offering more design services for sub-assemblies and finished products. OEMS are collaborating with EMS partners and moving into new models such as joint design manufacturing (JDM) and outsourced design manufacturing (ODM).
2. Virtual Reality in Electronic Manufacturing
Virtual reality technology is being adopted by electronic manufacturing companies to improve manufacturing efficiency. This technology in the electronic manufacturing industry is often referred to as digital design, simulation, and integration. Virtual reality technology enables companies to inspect design objects at all conceivable scales, thereby eliminating defects in the product in the design stage. Taking into account the growth rate of electronic equipment market globally, which is 5.2% according to TBRC, virtual reality has a big implementation scope in the forecast period.
3. Robotics and Automation
Many electronic equipment companies are using robotics and automation to improve plant efficiency and productivity. Sensors are being used in various machines to access invaluable data for improving efficiencies and reducing potential breakdowns. For instance, according to a report by Boston Consulting Group (BCG) in 2016, 1.2 million industrial robots are expected to be deployed by 2025, while the electronic equipment is expected to reach $2.1 trillion by 2020 according to TBRC, thus indicating a rise in automation and robotics technology adoption to improve productivity and reduce production costs.
4. IoT Technology Driving Smart Household Appliances
Household appliance manufacturers are integrating their products with the IoT technology to make customers lives comfortable and convenient. Internet of Things technology is the interconnectivity of physical objects and devices that are integrated with sensors and software that allow them to exchange and collect data. Major technologies enabling smart household appliances include Wi-Fi, Bluetooth Low Energy, micro server and micro-electromechanical systems.
For instance, LG has created homechat, an app that enables the user to monitor their refrigerators, cookers, washing machines, and other devices from anywhere through their smart phones. The homechat technology was introduced by LG initially in South Korea and is moving to other global markets gradually.
According to report by IHS, the global smart connected electronics shipments is estimated to reach over 223 million by 2020, while the overall market of household appliances is expected to hit $471 million according to TBRC.
5. Growing Demand for Smart TVs
The demand for smart TVs is being driven by the rising consumer preference for built-in smart functions in personal devices, and increasing internet penetration. A smart TV combines the features of televisions and computers, and comprises a television set with integrated functions for internet use. Smart TV users are also offered direct access to streaming services such as Netflix and Amazon Prime Instant Video.
To capitalize on this trend, television manufacturers across the world are entering the smart TV market. According to the IHS Technology report, 48.5% of televisions shipped globally were smart TVs, and the number is estimated to reach 134 million by 2020, while the audio and video equipment manufacturing market is forecast to reach $351 billion according to TBRC.
Where to Learn More
Read Electrical and Electronics Manufacturing Market Global Briefing 2023 from The Business Research Company for information on the following:
- Market characteristics
- Market size and growth
- Drivers and restraints
- Market segmentation
- Competitive landscape
- Key mergers and acquisitions
- Market trends and strategies
About the Author: Sindhu has years of experience in electronics research and consulting. She has worked on business research studies featuring industry analysis, strategic and financial analysis, opportunity assessment, competitor intelligence, and market sizing for electronics and electrical equipment verticals. Sindhu holds a bachelor’s degree in electronics and communication, and a post graduate degree in business administration from the Institute of Chartered Financial Analysts of India Foundation for Higher Education, Hyderabad. During her MBA studies, she worked as a freelancer for different market intelligence agencies specializing in electronics.