Rapid growth in global smartphone sales has meant huge profits for companies such as Apple, Samsung, and Google. Each smartphone contains a small motor that allows the phone to vibrate, which also means booming smartphone sales have had a positive effect on sales of these motors. On the other hand, increasing demand for smartphones has resulted in declining demand for other consumer electronics such as computers, printers and cameras, which require a higher average number of motors than smartphones. The net effect is that electric motor sales for use in consumer electronics are performing worse than sales of small motors into other non-industrial applications. From 2012 to 2018, global shipments of electric motors used in all non-industrial applications are projected to grow by a CAGR of 3.6%, while shipments of motors used in consumer electronics are forecast to grow by a CAGR of only 2.5%.
According to IHS, global shipments of desktop PCs and laptops fell by approximately 10% from 2012 to 2013 as smartphone sales increased by more than 8%. Smartphone replacement of computers is most evident in Asia Pacific, where disposable incomes aren’t able to accommodate multiple devices to connect to the internet. In the United States and Western Europe smartphone replacement rates are higher, with the average consumer purchasing new phones every two years, compared with computers that are replaced every four years. However, the market for desktop PCs is losing ground to laptops, many of which do not include cooling fan or disk drive motors. The overall impact is a growing market for slimmer, compact devices that require fewer motors.
Higher smartphone sales have also factored into lower sales of printers. As a result, motors shipped for use in printers fell by 1.2% from 2012 to 2013. The decline in printed media has come with the proliferation of digital media, and smartphones have decreased the need for consumers to print. A typical consumer in the developed world no longer needs to worry about scanning, copying or faxing documents, because their smartphones can take photos of these documents and distribute them with ease. Consumers can even take pictures of checks and have them deposited directly into their bank accounts. ATMs also have several motors to accept and distribute checks and cash, and if demand for ATMs falls, then small motor suppliers will have yet another reason to fear the rise of smartphones.
Smartphones would not be able to assist in mobile banking or copying documents without high-quality built-in cameras. Digital cameras, which potentially have up to three motors per unit, are now being replaced with phones that don’t require any motors for the camera feature. Although smartphone cameras still don’t match up to the capabilities of standard point-and-shoot cameras, consumers are willing to accept a little less perfection in exchange for less gadgets to carry around in their pocket. Flat growth is anticipated for shipments of motors used in cameras and optical equipment from 2012 to 2018.
Our smartphones are becoming our computer, remote control, camera, printer, game console and communication center. As technological innovation drives us towards more streamlined, multi-purpose devices, electric motor suppliers competing in the consumer electronics market will likely need to find new areas of growth. The automotive, home appliances and residential HVAC sectors of the non-industrial motors market offer the most opportunities for growth, especially for DC brushless motor suppliers. While technological innovation has benefited motor suppliers in these sectors, it has not had the same effect on motor suppliers supplying the consumer electronics segment of the market. With rapid technological change comes greater uncertainty, and it has become more important than ever for small motor suppliers to be more foresighted when developing strategies for growth. Shipments of more than 12 billion motors for non-industrial applications are anticipated by 2018.
Bryan Turnbough is an analyst at IHS Inc.