Global Consumer Electronics: Riding the Wave of Rising Consumer Demand
Growth in global IT spending to accelerate. Based on Gartner’s forecast, global IT spending is expected to register 8.0% y/y growth in 2024, followed by another strong increase of 9.4% in 2025 ...
Chief Investment Office - Hong Kong24 Jan 2024
  • Global IT spending is expected to rebound by 8.0% y/y in 2024 and 9.4% in 2025 (vs. c.3% p.a. in 2022-2023)
  • Following nearly two years of decline, PC and mobile shipments are starting to recover and this is mainly driven by robust sales of flagship products from Big Tech companies
  • Smartphone premiumisation and the incorporation of AI-related features will drive the growth of global shipments in 2024-
  • Stable macro conditions, coupled with more balanced inventory levels and improving consumer sentiment, are expected to translate to stronger demand for consumer electronics like PCs and mobiles
  • Maintain positive view on Technology and Communication Services sectors
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Growth in global IT spending to accelerate. Based on Gartner’s forecast, global IT spending is expected to register 8.0% y/y growth in 2024, followed by another strong increase of 9.4% in 2025 (vs. modest growth of 3% per annum in 2022 and 2023). High inflation, coupled with macro uncertainties, have previously affected consumers’ purchasing power, leading to the postponement of device purchases. Moving forward, however, we expect demand to rebound as the macro backdrop improves.

PC and mobile markets emerging from multi-quarter lows. . Global Personal Computer (PC) shipments had registered eight straight quarters of y/y declines since 4Q21, and 4Q23 marked the first positive y/y growth, which signifies the market has likely bottomed and is now on an uptrend. Similarly, the mobile segment is also showing signs of recovery from the trough, with global smartphone shipments rebounding by 8.5% in 4Q23, according to data compiled by the International Data Corporation.

The resurgence was mainly driven by robust sales of flagship products from Big Tech companies. Growth will be driven by cyclical handset replacements, which typically happen three years after a peak, with the most recent one occurring in 2021. We predict the trend of smartphone premiumisation and the incorporation of innovative Artificial Intelligence-related features to be some of the key factors driving the growth of global shipments in 2024.

Furthermore, despite slower growth in China (largest global smartphone market in the world), we expect it to participate in the global smartphone recovery trend in 2024. This will be driven by replacement demand for premium phones (especially the foldable models). Leading global chipmaker TSMC’s rosy outlook guidance issued during its recent earnings release also suggests looming recovery in smartphone and computing demand.

Improving consumer sentiment and inventory destocking setting the stage for stronger growth. . US soft landing and China’s macro stability, coupled with more balanced inventory levels and improving consumer sentiment, are expected to translate to stronger demand for consumer electronics like PCs and mobiles. With inventory destocking underway, we expect further improvements in both PC and mobile shipments. Shipment is expected to grow c.5% y/y in 2024 while average selling price should remain relatively stable or increase slightly.

Figure 1: PC and mobile shipments have bottomed

Source: Gartner, Inc., Market Share Alert: Preliminary, PCs, Worldwide, 4Q23, 10 January 2024; Market Share
Alert: Preliminary, Mobile Phones, Worldwide, 3Q23, 20 October 2023

Table 2: Peer Comp table

Source: Reuters, DBS, As of 18 January 2024

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