Stay-at-home orders arising out of the COVID-19 pandemic drove the need for technology to carry out work or schooling from home. As a result, people became dependent on consumer electronics goods to fulfill such needs. The trend also looks set to continue going forward as people’s dependency on electronic goods seems poised to sustain. Notably, Global Market Insights estimated in a
report that the global consumer electronics market is set to witness a CAGR of 7% between 2020 and 2026 to reach $1,500 billion by 2026.
The report mentioned that investments in the R&D segment for the development of new consumer electronic products which include smart phones, smart wearables and home appliances are set to drive the market’s growth. Moreover, the rapid increase in internet connectivity in several developed and developing economies across the globe is also driving growth opportunities for the consumer electronics market. In fact, consumer technology sales in the United States saw robust growth in 2020.
report by the NPD Group, through Dec 26, 2020, consumer technology sales rose 17%. Moreover, NPD estimated the sales momentum of consumer technology to continue in the first quarter of 2021 as well, with an expected growth of 12% year over year. However, NPD estimated sales to decline in 2021 as a result of the robust growth witnessed in the latter part of 2020. Nonetheless, Stephen Baker, vice president, industry advisor for the NPD Group, stated in the report that while “sales comparisons may stagnate, demand on an overall basis for consumer electronics will be higher for the next two years than it would have been without the events of 2020.”
Meanwhile, the report also stated that categories like smart home and PC game-related products are estimated to continue the positive momentum they had gathered even before the pandemic begun. Notably, NPD forecast growth of 9% and 3%, respectively, for both these categories in 2021.
The vaccine has already been deployed in the United States and hence, it can be expected that the economy will fully reopen sometime in the future. Even then, the changes that the pandemic brought about are expected to stay. Notably, Baker mentioned in the NPD report that trends like “improved in-home connectivity, home-based work and education, the growing number of screens to enable content consumption, and connected video capabilities in the home” are set to take hold more permanently due to the pandemic.
However, during the latter half of 2021, a shift to a more normal life will also lead to a renewed focus on mobility like thin and light PCs, charging solutions for phones and so on. Reflective of the increasing dependency on consumer electronics to drive daily people’s daily needs, Statista estimated that the global user penetration for consumer electronics
will be 25.3% in 2021 while it is expected to reach 34.8% by 2025. 4 Stocks to Watch
The demand for consumer electronics goods looks poised to sustain going forward, fueled by changes arising out of the pandemic. While at the same time, a return to a normal life is also expected to drive the focus to mobility solutions. With these factors in mind, the time seems prudent to keep an eye on companies focused on consumer electronics that stand to benefit in the future. Notably, we have selected four such stocks that carry a Zacks Rank # 2 (Buy) or 3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Apple Inc. ( AAPL Quick Quote AAPL - Free Report) designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, Mac, iPad, and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and so on. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 0.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 22.9%. NVIDIA Corporation ( NVDA Quick Quote NVDA - Free Report) operates as a visual computing company worldwide. It operates in two segments, GPU and Tegra Processor. The company's products are used in gaming, professional visualization, datacenter, and automotive markets. Notably, the company’s GPUs are an integral part of PC gaming hardware as they are required for rendering graphics. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 6.1% over the past 60 days. The company’s expected earnings growth rate for next year is 20%. Universal Electronics Inc. ( UEIC Quick Quote UEIC - Free Report) designs, develops and manufactures pre-programmed and universal control products, audio-video accessories and so on. The company offers universal infrared and radio frequency remote controls; software, firmware, and technology solutions that enable devices, including televisions, set-top boxes, audio systems, smartphones, tablets, game controllers, and other consumer electronic devices to wirelessly connect and interact with home networks, among others. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 0.2% over the past 90 days. The company’s expected earnings growth rate for the current year is 14.8%. Flex Ltd. ( FLEX Quick Quote FLEX - Free Report) provides design, engineering, manufacturing, and supply chain services and solutions to original equipment manufacturers in Asia, the Americas, and Europe. The company offers chargers for smartphones and tablets; adapters for notebooks and gaming systems, among others. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 6.1% over the past 90 days. The company’s expected earnings growth rate for next year is 10.3%. Breakout Biotech Stocks with Triple-Digit Profit Potential
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