China gadget spending to overtake EU

Chinese spending on technical consumer equipment is set to overtake that of western Europe some time in 2009-2010, according to a report released on Friday.

The phenomenal growth in China has seen expenditure on items such as mobile phones, flat screen televisions and personal computers increase 19 per cent in 2007, with revenues expected to top $100bn by 2009.

The report, by marketing group GfK and CEA, the consumer electronics group, shows that spending on electrical gadgets will slow down in western Europe and North America, with the double-digit growth of 2007 slowing to 2.3 per cent and 4.9 per cent respectively. But much of the global growth in 2008 will come from Asia, with revenues forecast to grow by 16.5 per cent.

Global revenues are set to rise 9.4 per cent in 2008, in spite of gloomy economic forecasts and lowering prices for many consumer electronic products.

Some of the growth is driven by replacement technologies, such as laptops outstripping revenues from desktop PCs, and sales of mobile phones with flat screens to replace older handsets.

The rise of multi-function devices, such as mobile phones with cameras or MP3 players built-in has not stopped people buying separate devices. Claude Floch, marketing director of GfK, said: “Although there are products with more functions for the same price, it doesn’t mean it will kill the dedicated device. People want a specialised camera to take on holiday, rather than use their phone.”

The growth in gadgets and technical electronics is also helping the market in accessories, such as memory cards, batteries, digital photo frames and printers.

Antony Rode of GfK also noted that an increasing number of sales are of portable devices. “In the past, hardware products were for your home. Now, half are for your living room, half are in your pocket.”

More than 2bn portable devices were sold last year.

Another high-growth area is game consoles, with products such as the Wii, Xbox 360 and PlayStation 3 entering the market in recent years. Mr Rode said: “We have never seen such a boom.”