Industry Focus: Consumer Electronics

Consumer electronics is a vast, well-established category. But it also is one that is undergoing dramatic changes, some of which ultimately trickle down to supply chains.

By Sandy Smith

Consumer electronics is a vast, well-established category. But it also is one that is undergoing dramatic changes, some of which ultimately trickle down to supply chains.

The industry is expected to grow at a three percent rate through 2021, according to the data and analytics firm NPD Group. That is “notable for a mature market where consumers are not replacing or repurchasing tech items at the same rate they did in prior years,” wrote Stephen Baker, the analyst covering the industry for NPD.

Smartphones are ground zero for the slowdown of replacement products. These days, users typically hold on to their smartphones for a little more than two-and-a-half years. But consider that the smartphone is only 12 years old, something that Apple CEO Tim Cook pointed to when asked if the market was reaching maturity. Twelve-year-olds are not inherently mature, was Cook’s point.

WHETHER IT’S MATERIAL HANDLING IN THE WAREHOUSE OR DELIVERY TO THE CONSUMER, IT WOULD BEHOOVE US TO LOOK TO OTHER INDUSTRIES THAT HAVE BEEN CONTENDING WITH THESE KINDS OF CHALLENGES FOR SOME TIME.

—CARLO MALAGUTI, TECSYS

Whether the smartphone market will again return to creating the kind of product that demands we upgrade annually remains to be seen. But the devices themselves, along with others that we hold closely (literally and figuratively) are changing every aspect of life. Ring doorbells have become a valued tool in crimefighting, but those same Ring cameras in homes have proven to be hackable.

And that perhaps more than anything points to two major trends behind consumer electronics: Everything is a consumer electronic these days; and security remains a vital concern throughout the entire lifecycle.

Beyond those industry-specific challenges, however, some of the issues facing consumer electronics will seem familiar, said Carlo Malaguti, senior supply chain applications specialist, warehouse, for MHI member Tecsys, a supply chain management software firm.

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